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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2013 was the year of sensational events that never happened.
We heard about a bubble, but there wasn’t one.
We read that the Australian property market was white hot, but with rare local exceptions it wasn’t so.
There was much discussion about an affordability crisis, when all the statistics showed the opposite.
We were told yet again about the mythical housing shortage crisis, but neither the vacancy figures nor the rental growth data supported the notion. According to the REIA, six of the eight capital cities have vacancy rates ranging from 2.7% to 4.5%.
Some reported that the market had peaked, despite the lack of supporting evidence.
So what really happened in 2013?
It was year in which nothing remarkable happened at all. It was a year “full of sound and fury, signifying nothing”.
Some of our biggest markets sparked to life for the first time in many years. Sydney produced its first year of meaningful growth in a decade, though well short of the runaway boom depicted by an irrational media.
Perth produced its first year of solid price growth since its previous peak in 2007. Melbourne showed some life as well, but annual growth in the median house price was moderate, around 6-7% according to three major research sources. (We ignore the inflated figures published by the REIV).
Elsewhere among the capital cities, there was little to shout about. Darwin started the year as the market leader but its numbers moderated throughout the year. Brisbane showed the first glimmers of a return to price growth, but only 3-4% in annual terms.
Adelaide, Canberra and Hobart were largely non-events. As usual, it depends on whose figures you believe. Using the ABS House Price Indexes as a guide, annual growth was around 1% for all three cities.
All in all, it was a year that at no stage warranted the hysterical headlines it generated. The average result across the state and territory capitals was annual growth around 6% or 7%, with most of that figure generated by just three of the eight cities.
The real star performers were places we never heard about because they were out in the regions. Some regional centres recorded median price growth above 15%, including Port Lincoln in South Australia, Narrabri in New South Wales and Miles in Queensland.
So what did we learn this year?
The greatest lesson is that there is no such entity as “the Australian property market”. There are thousands of local markets, moving in various directions and at different speeds.
We learnt that boom-style growth is more often a curse than a benefit, as developers have an extraordinary ability to destroy those markets with over-supply. Central Queensland was surplus central in 2013, with Gladstone, Mackay and Emerald all experiencing declining markets because of over-building. We have previously seen high-population growth locations like Wyndham City and the Gold Coast go into sharp reverse, weighed down by too many new dwellings.
We learnt that developers don’t really care if major city markets are over-supplied as long as they can flog off their apartments in China. Melbourne is a stark example and inner-city Sydney and the Gold Coast are poised to follow suit. Smart investors will avoid these places.
We also learnt that the worst place to go for balanced and accurate information on real estate is the metropolitan newspaper industry.
So what of 2014?
I expect a solid year, with the price growth more evenly spread than in 2013. Brisbane will rise through the pack to be a market leader in 2014. Sydney and Melbourne will moderate somewhat but still have positive years, while Adelaide will produce its best growth since 2010.
The big struggler will be Canberra. It has an over-supply of dwelling, particularly apartments, and the public service cuts by the new federal government will hurt.

<hr>
Terry Ryder is the founder of <a target="_blank" href="https://www.hotspotting.com.au/" rel="nofollow" style="font-size: 14px;">hotspotting.com.au</a> and you can contact him via <a href="https://mailto:%20ryder@hotspotting.com.au" target="_blank">email</a> or on <a href="https://twitter.com/hotspotting" target="_blank" style="font-size: 14px;">Twitter</a>.
 
 
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terryryder-YECXbqmri2

2013: The year of crises which never were

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After we find a development site for our client, one of the most important processes is to negotiate not only the purchase price, but the terms of the purchase.

Terms are the conditions you want to use when purchasing the property - and terms can be very powerful for you.
As a property developer, one of the first terms we always negotiate is an extended settlement. Property Bloom wants to ‘buy’ as much time as possible to get as much done before our client settles on the land. Once settlement takes place holding costs come into play in the way of interest payments on their loan.
We will often achieve a twelve week settlement and permission from the vendor to lodge a development application (DA) during the settlement period.  So after exchange, we swing into action and order a contour survey, within a few days this is with our builder and they are working on plans and the DA preparation. We can have a DA lodged with council within a few weeks of exchange and then we manage council as best we can to try and have the DA consent before or as our client is settling on the land.
Another key term is a low deposit, for the very same reason as a long settlement, to minimize holding costs.  Most sales contracts will ask for a ten percent deposit, we have been able to achieve a five thousand or even a one thousand dollar deposit.
A quick calculation based on purchasing a development site say at $250,000 and paying a ten percent deposit or $25,000 will cost $146 a month in interest over a three month settlement period based on 5.5% interest rate. Yet a $1,000 deposit over the same period and interest rate will cost just $4.58 a month so we can save about $424 over the settlement period – every little bit helps. You can get a bigger saving right now from the NSW government under their new home grant which will save you $5,000 off stamp duty if buying land to build on or a brand new or off the plan property, check it out <a href="https://www.osr.nsw.gov.au/grants/nhg/about" target="_blank">here</a>.  
Another term Property Bloom usually throws into the negotiation process is to waive the cooling off period. By the time our client is ready to exchange, we have done all our checks and research and our client has an unconditional loan approval, so there is really is no reason to ‘cool off’ as our client has committed to the project weeks before. To waive the cooling off period adds weight to your offer and gives the vendor piece of mind that there won’t be a last minute change of heart.
We will always make offers subject to pest and building inspections (if there is a house on the land) and to conditional loan approval (which our clients have up to a level even before we make an offer).
Another term we’ll use is to release the deposit to the vendor once exchange has taken place. We usually save this one as a final tool to leverage the sale depending on the vendor’s situation. We will gauge this from the selling agent.
You can also offer the vendor two or three different purchase prices at the same time - each with different terms. We may offer a higher price but with a longer settlement period and ask for access to the property during the settlement period to start renovations. We’ll include a lower offer but with a fast settlement – as long as we are sure that our client does have fast access to finance. This gives the vendor options or choices which empowers them.
The vendor may not quite be ready to move out of their home so you can offer them a rent free period or reduced market rent to sweeten the deal.
Maybe there is a lot of rubbish lying around the property and if your plan is to renovate or demolish the house, you can tell them that you’ll remove the rubbish at your cost, anything like this that makes their life easier and the sale process quicker will help you so be creative and think about how you can meet the needs of the vendor.
After the offer is accepted then you can also negotiate on the terms in the contract of sale. Many of the terms in the sales contract will be standard, which means that they’ve been in use for a long time and are fair to both seller and buyer. Your solicitor will check the clauses of the contract to make sure they do suit you and if not, they will ask for changes to be made.
In order to cut the best deal on your property purchase, be creative with your terms and if you show sympathy to the vendor then this may give you the edge over other buyers.

<hr>
Jo Chivers is director of <a style="font-size: 14px;" target="_blank" rel="nofollow" href="https://www.propertybloom.com.au/" title="Property Bloom">Property Bloom</a>, which manages property development.
 
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Sweeten the deal by negotiating terms of purchase

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Hi Margaret, 
 We own a five acre block near Darwin with a four-bedroom house under renovation. 
 My hubby is a 65 year-old self-employed tradesman and as we are not overly endowed with super, had the idea that if he built a small residence (granny flat) on same block with separate power, water etc, we could base ourselves there and rent out the main dwelling for income.
We would also caretake the block, e.g. mow lawns, remove palm frond,s etc. (There are a lot of properties this size in this area which build granny flats /dependant units and rent those out seemingly with no trouble planning-wise it seems.) We can’t subdivide five acres here. 
 Can you please advise if our idea is even feasible tax wise before we look into it further? I realise it is a pretty broad query! 
 Many thanks, 
 Jane 
 
Dear Jane,
This is an interesting question and one which is not often asked, and so I referred to Julia Hartman, a great expert on these more obscure scenarios.
She has said that there are many things to consider, the main one being the capital gains tax exemption for your principal place of residence. Once the granny flat is built, if you moved into it immediately, then from a tax point of view this would be treated as two separate properties. Once you rent out the former family home, the cost base of that property is considered to be the market value at the time. The granny flat and the land underneath it would also be given a market value.
At this point you would have to choose which one you wanted covered by the main residence capital gains tax (CGT) exemption – and ahead of time it can be really hard to work out which of the two is likely to have the greatest amount of growth.  If you choose the former family home to have the exemption, then the granny flat and its land will have CGT from its determined market value, and if you choose the granny flat, then the family home will attract CGT from the market value established upon you moving out.
If you don’t want  the property to be treated like two separate assets,  then you need to live in both the granny flat and the house, combined as your home, for the first three months at least.  This way, the two houses are seen as one dwelling,  and for CGT purposes the treatment would be just the same as if you were renting out rooms or part of your home.  This of course exposes the whole property to CGT from the market value of the whole property at the time the granny flat is built, but only for the portion of the home which was rented out – and so it’s done on a pro rata basis.
As you can see – its complex! It’s going to be really hard to actually work out which pathway is the best one to take, since you can’t really estimate future values.  Make sure that you have an accountant who can help you work out some ballpark figures and don’t make any decisions until you have a clear understanding of what could potentially happen in the future.
Regards,
Margaret.
<hr>
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

How will building a granny flat work out tax wise?

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The $3 billion battle for the Commonwealth Property Office Fund further intensified today after the Dexus consortium matched the rival offer from the GPT Group.
Dexus and partner the Canada Pension Plan Investment board raised the value of its original bid from $1.21 to $1.27 per Commonwealth Property Office Fund (CPA) unit - matching that of GPT.
The revised offer includes a cash payment of 77.45c and 0.4516 Dexus stapled securities.
GPT is offering $0.75325 in cash and 0.141 GPT securities for every CPA unit.
In making its revised offer, Dexus said the offer would not be subject to a minimum acceptance condition and would only have "limited customary conditions".
Commenting on the revised offer, Dexus chief executive Darren Steinberg said "the due diligence process has enabled us to confirm our view on value".
Dexus said it intends to exercise its right to take physical delivery of 350,000,000 CPA units under the forward contract with Deutsche Bank on January 3, 2014.
But Dexus suggests that based on its closing price on December 10, 2013 its offer valued at $1.27 is a 2.6% premium to the GPT offer on a comparable basis.
<a target="_blank" href="mailto:news@propertyobserver.com.au">news@propertyobserver.com.au</a> 
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Battle over Commonwealth Property Office Fund intensifies

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When Australia’s biggest underwriter of lenders mortgage insurance rules a line through an entire asset class of property then investors should take note.  
Recently Genworth announced that from December 19, 2013 they would no longer accept off-the-plan or new properties as security when purchased in self-managed super funds. The announcement reads:
“Off-the-plan purchases and new properties that have been completed for less than 12 months are no longer acceptable. A “new property” is defined as being any property (including any house, unit, villa or townhouse) that has been fully completed for less than 12 months and/or has not been previously sold since construction (i.e. the vendor is a developer/builder or a related party of the developer/builder).”
Genworths’ role in the finance world is to ensure a bank does not lose any money if a borrower cannot meet their loan repayments. If the bank is forced to sell the property and is still left short the mortgage insurer fills the gap.  
Lenders mortgage insurers are very conservative by nature and they are sending a clear signal that they do not see a positive capital growth outlook for these types of properties.  
Genworth is looking to protect its own bottom line and are ruling out allowing their SMSF clients to invest in properties they think are risky investments. While the main reason for this is self-preservation it does provide a level of protection for these investors.  
At the same time that Genworth is waving a red warning flag to wealthy SMSF investors the government is still encouraging first homebuyers to buy this exact kind of property.  
Our government knows how important the building industry is to our economy so they are making it appealing for first homebuyers to invest in new properties only.  
For example a payment of up to $10,000 is available for eligible first home owners in Victoria for contracts entered into on or after July 1, 2013 to build or purchase a new home valued at up to $750,000.  In NSW the grant is currently $15,000 for first home buyers who build or buy new property.  
The government is leading first home buyers to focus on one particular type of property. Again the focus is to underpin the building industry but the byproduct is many first home buyers are in danger of being placed in a dangerous position.  
This is because new properties tend to have a low land to asset ratio meaning most of the value is tied up in the building not the land. It is land that appreciates in value and buildings depreciate. The result is capital growth that is more likely to fall behind the rest of the market. In addition new homes and apartments tend to be clustered together and can often be located in areas where there is an over supply of similar property.  
The current first home buyer policy solves a short-term problem by creating jobs in the building sector. However in the long run it is likely to place young first home buyers under financial pressure. The policy fails to acknowledge the dynamics of the property market and lures them into buying properties that well educated investors are avoiding.    
 
<hr>
 Mark Armstrong is a director of <a href="https://www.ipropertyplan.com.au/">iProperty Plan</a>, which provides independent analysis and tailored advice to investors and home buyers.
 
 
 
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The first home buyer policy is luring people into properties investors know to avoid

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An RP Data quarterly review of the residential property market and the Australian economy has found that vendors are much more empowered than at the same time last year.
It found vendor discounting - the average difference between the original listing price and the final contract price on a property sale – had swung the vendors’ way.
<img src="/images/stories/2013/12/03/vendor-discoutning-dec-3-one.gif" alt="vendor-discoutning-dec-3-one" height="224" width="470">
Discounting provides the best indication about how much negotiation is in the market and is a good proxy for understanding the balance between buyers and sellers.
The review found that, over the past year, the housing market has begun to start favouring the seller. Across the capital cities, the average discount in September for a typical house was -5.7%, and for units -5.2%.
At the same time in 2012, the average discount rate for houses and units was -7.2% and -5.7% respectively. This highlights improved vendor price expectations over the year.
Discounting levels are now at their lowest levels in more than three years, reflecting recent significant improvements in selling conditions.
<a target="_blank" href="mailto:staylor@propertyobserver.com.au">staylor@propertyobserver.com.au</a>
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staylor-63KgDrKwoY

Pendulum swings towards property vendors: RP Data

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With an influx of foreign investment interest in Australia, it is vital to bridge cultural differences for a smooth working relationship and successful business transactions.
Melbourne property consultant Anthony Chiminello, who has had 15 to 20 years of experience dealing with clients from various backgrounds, tells Property Observer that the basic requirements or approach to negotiation for everyone – regardless of cultural background – is “fundamentally the same”: respect, honesty, and professional service.
Yet he has noticed that it is important to utilise those qualities according to different cultural requirements. 
He believes Australia is missing out on billions of dollars worth of business with China and other Asian neighbours because Australians focus on the deal first, rather than seeking to understand the clients and their culture.
“In the west, we deal with clients on an intellectual level. That tends to restrict the transaction to very broad terms: How much money you’ve got, and what I’m prepared to sell you,” Chiminello said.
In his experience, he has found that cultivating a deeper relationship with the client often pays off.
“It’s about understanding each other, the person behind the deal and the culture. It takes time and some effort, investing a bit more emotion or heart,” he notes. 
Conversely, investing time getting to know a potential client may not necessarily result in a deal. But Chiminello says that those clients were usually referrals from their relatives or associates.
“Sometimes you’ll find you develop a friendship with someone and there’s no business, but they then become your ambassador and promote you to all their friends and relatives,” he said.
He also advises that there will be clients out there who will “use and abuse”, but it’s also up to the other party to know when to draw the lines and know that someone is wasting their time.
“It’s good business sense, as opposed to being caught out,” he said.
One of the biggest challenges in bridging the cultural divide between an Australian property consultant and an Asian client is allowing enough time for both parties to get to know each other, Chiminello says.
“Patience can be a big challenge, especially in a fast-paced world,” he said.
“Sometimes their decision timeline is a lot longer. They tend to want to know a lot about peripheral things than the deal itself – more importantly, they want to get to know you,” Chiminello added.
Language can also be a barrier, especially with investors from Mainland China. Chiminello feels that interpreters sometimes do not accurately translate the emotions behind the language, resulting in a lot of wasted time trying to understand what the other party actually means.
While “Asian buyers” can be a broad term, Chiminello adds that investors from Hong Kong, Singapore and Malaysia are aware of western values and practices, making it easier for property consultants.
However, the emerging middle classes from Indonesia, Mainland China, and Vietnam have not necessarily been exposed to western business practices. In this case, there could be a learning curve in getting to know a prospective client.
Chiminello notes that the idea of building a relationship with a client stems from Confucian teachings which emerged some 2000 years ago.
“That philosophy is carried through, and it should be a basic premise for long-term business and improving the potential of doing business with each other. It’s about getting to know the person’s culture and getting to know them in detail. In many ways, it’s common sense,” he said.
Here are Chiminello’s top tips for building relationships with Asian buyers:
<ul>
<li>Don’t expect to do a deal on your first meeting.</li>
<li>Take an interest in the person on a holistic level. This includes their life, culture, lifestyle and family, as opposed to just focusing on the business. </li>
<li>Build a sense of trust between the two parties.</li>
<li>Cultivate some patience before jumping into a deal, and don’t expect everything to happen yesterday.</li>
</ul>
As a result of his interest in building goodwill and cultural ties with Australia’s Asian neighbours, Chiminello has produced a publication titled ‘Calendar for Life’.
It features bilingual poems coupled with illustrations by children from Singapore, Malaysia, China and Melbourne based on the theme of harmony. The publication can be purchased <a href="https://www.culturalharmonynow.com" target="_blank">online</a>.
<a target="_blank" href="mailto:dleow@propertyobserver.com.au">dleow@propertyobserver.com.au</a>
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dleow-BGaNPbHWyK

Building relationships vital to dealing with Asian buyers: Anthony Chiminello

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Less is more for Christmas shoppers this year, according to a poll of 1,000 shoppers in the 10th annual National Consumer Sentiment survey by Mortgage Choice.
This year’s survey found 40% of respondents planned to spend less during this festive season – not exactly what retailers would want to hear.
However, there is an upside: the figure is less than last year’s 52% of respondents planning to spend less, and 2011’s 41% of respondents.
Australia-wide, Victorians are less likely to change their spending habits for this year’s festive season, with 61% saying they would "spend the same", according to the broker’s spokesperson Jessica Darnborough. "This reinforces the idea that most people are comfortable with their finances," she said.
This figure is slightly higher than the 56% in NSW and South Australia, 55% in Western Australia and 49% in Queensland.
"People today are a lot savvier with their money. They don’t want to outspend their means and this ensures they feel comfortable all year round."
Another insight came from the responses to the question: ‘What would you most likeIy put a $2,000 windfall towards? One-in-three respondents said their ‘savings’.
"This shows how conscientious people are with their savings and finances these days," Darnborough said.
<a href="https://mce_host/staylor@propertyobserver.com.au" target="_blank">staylor@propertyobserver.com.au</a>
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Less is more for Christmas shoppers this year

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RP Data’s median house and unit prices in Melbourne extend over nearly 40 years from 1974 till now.
It clearly shows that the last decade has been the most volatile proceeded by much more moderate cycles in house prices.
The first comparatively rapid rise in prices was in 1988 through to 1989 when median prices of houses rose by 42% in two years. After this median prices fell and otherwise stagnated before once again reaching their previous peak eight years later in 1997.
Another period of reasonably strong and rapid appreciation occurred through 2007 and into early 2008 when the median house prices rose 20%.  Nearly half that rise was lost in 2008 as prices fell.
Unlike previous cycles there was little to no gap until the next growth phase when over 2009 and 2010 median prices rose by 37%.
Until the last decade sharp falls in prices where not common but they have been a recent feature of the market and are a sign of its volatility.
One reason for this difference was the shock of the financial crisis, which resulted in not only confidence sharp fall in consumer confidence but also a matching boost to the market through the stimulus program.
The ongoing hangover from the financial crisis, a significant fall in the rate of housing credit growth and lower levels of consumer sentiment have led to more volatile times for the housing market.
 
<hr>
 Robert Larocca is Victorian housing market specialist for <a rel="nofollow" href="https://rpdata.com/" target="_blank">RP Data</a>.
 
 
 
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The last decade in Melbourne has been the most volatile on record

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Retail giant Harvey Norman’s franchises in Victoria and Tasmania have been fined a total of $116,000 for misleading customers on their consumer rights.
The fines come after <a target="_blank" href="https://www.smartcompany.com.au/legal/34724-electronics-retailers-found-to-be-breaching-consumer-law-85-of-sales-staff-got-it-wrong">consumer group CHOICE concluded 85% of the salespeople they surveyed</a> in a secret shopper investigation misunderstood their Australian Consumer Law obligations.
The Federal Court ordered three franchises, located in Sale and Hoppers Crossing in Victoria and Moonah in Tasmania, to pay fines of $28,000 each, and a fourth franchise in Launceston to pay $32,000.
Following an investigation by the Australian Competition and Consumer Commission, it was revealed that staff at the franchise stores had told consumers they had no obligation to provide remedy for damaged goods unless notified within a short period of time, such as 14 days.
They also led customers to believe they had no obligation to provide an exchange or refund for faulty goods and that they had no legal requirement to provide a remedy independent of the relevant product manufacturer.
The Launceston store went a step further and stated on customer receipts that “no claims will be honoured on damaged goods unless notified within 24 hours of delivery or pick-up”.
Consumer law specialist and partner at law firm Hall &amp; Wilcox, Ben Hamilton, told SmartCompany goods and services were protected under the ACL.
While the legislation doesn’t explicitly state terms for refunds or warranty, Hamilton said companies must be aware of their obligations “that the goods are of acceptable quality, and business can’t contract out of that”.
He says the supply of goods or services up to $40,000 worth are protected by consumer law, and that “regardless of value, any goods and services ordinarily acquired of a personal or domestic or household use” are protected.
Hamilton says businesses violating these obligations are doing so “at their own peril”.
An additional obligation retailers must now be aware of is their responsibility to offer consumers a refund or repair of all faulty big ticket purchases, regardless of the warranty conditions.
In 2011 the legislation changed which saw retailers responsible for major failures to big ticket purchases.
In these situations, the consumer gets the option to end the contract with the supplier and seek a replacement, repair of refund.
For a refresher on the obligations in the ACL, see the <a target="_blank" href="https://www.accc.gov.au/consumers/consumer-rights-guarantees/consumer-guarantees">ACCC’s guidelines on guarantees</a>.

<hr>
This article first appeared on <a target="_blank" href="https://www.SmartCompany.com.au">SmartCompany</a>.
 
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