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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The tide is turning for Australia's bulky goods centre sector, with both investor demand returning and yields likely to tighten in 2014.
For years bulky goods have been seen as higher risk than other retail property assets. But new research from Colliers International is showing that a recovery is underway in bulky good sales, in particular in the key household goods, hardware and garden supplies categories. The research further found that a "pick up" in the sector is emerging in retailer demand.
<img src="/images/stories/2013/11/27/chart-of-the-week-nov-27-one.gif" width="470" height="302" alt="chart-of-the-week-nov-27-one">
"Investor interest in the prime end of the bulky goods sector is starting to see signs of an increase in the depth of demand, with a number of large transactions having occurred over the last 12 months," said the Colliers report titled Balancing the tenancy mix. “This reflects the expectation that market conditions will improve and the favourable terms (higher yields) at which assets in this sector can presently be acquired".
Year-to-date transaction volumes for bulky good centre assets of more than $10 million totalled $653.95 million, with 18 transactions recorded. Based on those numbers, volume is above the five year average of $576 million but well down on the total sales volume of $944 million achieved in 2012, it said.
Despite some of the positive numbers for the sector, one key measure which remains soft is yields. Average yields across the 18 transactions, Colliers noted, indicated a further softening of yields to 10.6%. That compares to the previous year's 9.3% and 8% in 2008.
However, Colliers said that values in the sector appear to have bottomed and that private investors had been "building up" their portfolios.
Rents were steady for bulky goods centres and vacancies tightened nationally.
The report concluded that while the bulky goods sector is considered higher risk than other retail investments, "this risk currently appears to be overpriced, and therefore there is scope for yields to tighten during 2014."
It also believes that with interest rates low and the anticipated increase in residential transactions, sales for retailers in the bulky goods sector was likely to improve over the next 12 months. "While this is positive, it is likely to take some time to flow through to rents," it said.
Colliers is forecasting rental growth to likely remain in line or slightly above CPI during 2014.
<a href="mailto:news@propertyobserver.com.au" target="_blank">news@propertyobserver.com.au</a>
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kjiminez-eaYKfU7qd2

The tide is turning for the bulky goods sector

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Tenant damage is not a new phenomenon, and it strikes fear into the hearts of many investors. We've compiled a list of some of the more terrible cases of tenant damage we've read about across the globe.
Vote on yours at the bottom in our poll of the day, and send in your own examples.
1) $13,000 worth of damage - and all on video
{qtube vid:=ovtinAAqb_Y}
This video shows $9,000 worth of tenant damage from a Section 8 Housing Tenant in the United States. It shows significant carpet damage, and the tenants' own paint job, among dirt, broken doors and more.
Across their multiple condos, there was a total of $13,000 damage.
2) Peanut butter on the walls
This 2012 story has to be seen to be believed, as we were wide-mouthed reading it. The <a href="https://www.thestar.com/life/homes/2012/09/27/my_tenant_wrecked_the_place_now_what" target="_blank">Toronto Star reports</a> that landlord 'Steven' evicted his tenant with the Sheriff, to find the apartment destroyed.
Broken sinks, toilets, doors, windows and light switches were just the start of his worries... there was ketchup and peanut butter on the walls as well! The tenant also seemed to act particularly maliciously in pouring dried rice down the toilet to clog it.
3) Damp, dog excrement and damage
UK's <a href="https://www.thenorthernecho.co.uk/news/10419114.Couple_s_devastation_as_former_Darlington_home_wrecked_by_tenants/" target="_blank">The Northern Echo discusses</a> landlords who rented out their three-bedroom former home.
Coming home to find it riddled with damp, dog excrement, an overgrown garden, ripped wallpaper, a smashed bath screen and cupboard doors hanging off... it's not a pretty picture.
4) Rotting rubbish in every room
The <a href="https://www.qt.com.au/news/rental-house-of-horrors/1984543/" target="_blank">Queensland Times earlier this year</a> pointed to this rental house of horrors, with piles of garbage left rotting and reeking throughout the house (including food waste), punched in walls, uprooted trees and plants, and all sorts of mess.
This was in Wallbank, and the landlord didn't take a bond from the tenant. He noted he now had to sell the property due to the financial hardship caused.
Read this article from Leah Calnan as to <a href="/news">why taking a bond is always crucial</a> (if you're still not convinced).
5) £20,000 worth of destruction
UK-based landlord, Glenn Schofield, rented his four-bedroom property to an 18 year old in 2011. The teen's girlfriend moved in, and problems started to occur with complaints from the neighbours. Suddenly, the rent stopped, <a href="https://www.dailymail.co.uk/news/article-2063189/Tenant-hell-trashed-home-leaving-landlord-20-000-clean--wont-pay-penny#ixzz2lhft2XDC" target="_blank">reported the Daily Mail</a>.
After finally getting the tenants to leave in August, he spent £2,000 cleaning and had a quoted £18,500 bill to fix everything left - from broke appliances to a blocked and overflowing toilet.
Broken windows, mess and, the worst part of all, no compensation ensued. 6) The tenant kept a pig or a goat in here
This month, <a href="https://www.ntnews.com.au/article/2013/11/17/327490_ntnews" target="_blank">NT News reported</a> about a landlord left with a $14,000 repair and rental arrears bill to cover that may have actually been the result of a literal pigsty.
"I heard from other residents the tenant had a live pig or goat in there," the landlord told the local paper. Damaged furniture, walls, lights, and even ceiling fans are on the list making up the repair bill in the Stuart Park home.
Have you ever had a nightmare tenant? Or, have you been on the receiving end of a nightmare landlord?
{module Which of these cases of tenant damage is the worst?}
 
<a href="mailto:jduke@propertyobserver.com.au" target="_blank">news@propertyobserver.com.au</a>
 
YOU MIGHT ALSO WANT TO READ: Ask Margaret: <a href="/news">If I buy a property to rent out, what insurances do I need to cover me for the tenants etc? </a>This guide: How to keep good tenants
Click over page for some tips on avoiding this type of damage from your tenants, and what to do when things go wrong.
 
 
<hr class="system-pagebreak">
Tips for avoiding tenant dramas with Carolyn Majda
Think about the type of tenant you want to attract - Consider this before purchasing the property - Think about the demographic of the area - Look for a large pool of prospective tenants Keep up appearances - Poorly presented properties may deter good tenants from applying - Lower maintenance properties are easier to care for by everyone involved - Minimise the effort required by the tenant to keep the property in good order Generate interest - Place good advertising - Ensure the photos present the property well - Provide lease deadlines - Have open inspections at times when the tenants you want to attract are available (e.g. after work hours for young professionals) - Talk to as many potential tenants as possible so you can put faces to the names Screen tenants - Contact their employers to confirm details - Contact previous landlord to discuss any issues - Contact any personal referees listed - Consider speaking to responsible adults if it is their first lease - Access tenant databases Attend to maintenance issues promptly - Do not let your tenant question your commitment to the property - Have a tailored insurance policy that covers malicious and accidental damage
<a href="https://www.propertyobserver.com.au/landlords/how-to-find-and-hold-good-tenants-carolyn-majda/2012071755510" target="_blank">More available here</a>.
 
YOU MIGHT ALSO WANT TO READ: Ask Margaret: <a href="/news">If I buy a property to rent out, what insurances do I need to cover me for the tenants etc? </a>This guide: How to keep good tenants<a href="/news"></a>
 
<a href="mailto:jduke@propertyobserver.com.au" target="_blank">jduke@propertyobserver.com.au</a>
 
 
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Six bad cases of tenant damage: Which one is the worst?

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It’s no revelation that the retail sector has been doing it tough for the past few years. Every month’s release of retail sales data by the Australian Bureau of Statistics is eagerly awaited. Likewise, the Westpac Melbourne Institute index of consumer sentiment, regarded by many as a pointer towards future retail sales. Has the low interest rate environment caused consumers to loosen their purse strings? What about the impact of rising house prices on consumers’ perceptions of wealth and, hence, willingness to spend? Has the post-election rebound in sentiment been sustained?
These are interesting questions, and the course of retail spending over coming years is critically important to the success of Australian retailers and their landlords.
However, there is another factor of critical importance to both retailers and retail landlords that tends to get overlooked—the impact of a lower Australian dollar on retailer profitability and shopping centre incomes. Of course, there’s plenty of discussion about the fluctuations in the dollar, but it tends to overlook this aspect. It focuses more on the potential upside of a lower dollar—there may be less expenditure leakage overseas (both online and in-store when holidaying overseas) and, conversely, more spending by overseas visitors in Australia as we become a cheaper destination.
However, we believe that these positives are likely to be well and truly offset by a negative impact on retailer profit margins. BIS Shrapnel forecasts that the dollar will fall by around 23% against the trade weighted index from its peak earlier this year. Picking the timing is more difficult, as currency markets are notoriously volatile. Our assessment is that it will happen within around three years.
We have carried out a scenario analysis to estimate the impact of a weaker dollar on retailer profitability and capacity to pay rent. The results aren’t pretty. One of the key issues is that many retailers import a high proportion of the goods that they sell, leaving them exposed to currency fluctuations. Hedging only delays the impact. We estimate that a typical retailer who imports 50% of product sold will see their profitability fall to zero if they continue paying current rents. Clearly, this is not sustainable. In reality, the pain will be spread between the wholesaler (where there is one), retailer and landlord. In this example, downward pressure on rents will be in the order of 10%, albeit spread over several years. In fact, we’re already seeing downwards pressure on rents, but this is not yet reflecting the lower dollar impact.
It will be hard for landlords to absorb the impact and many will be looking to replace tenants with others who are less exposed to the vagaries of the dollar. Service industries are the obvious choice—but how many nail bars do we really need?
 
<hr>
 Maria Lee is senior project manager with <a href="https://www.bis.com.au" target="_blank">BIS Shrapnel</a>.
 
 
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Weaker Aussie dollar could have significant impact on retail landlords

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Asbestos is the word of the week, and for good reason - it's dangerous stuff. The list of where it can be contained in a property is neverending, from sheeting, tiles, splashbacks and coatings to the glue itself used to hold everything together.
Since it is asbestos week, the media and a number of government agencies are actively getting behind the issue of asbestos and the dangers it poses in and around homes. Most of the drive is centred on the concerns relating to renovations, particularly for DIY renovators. Yes, 61% of DIY renovations are affected but what about the dangers faced by tenants in some areas of Sydney where properties are riddled with compromised asbestos sheeting?
Some weeks ago I noted this (in <a target="_blank" href="/news">a video filmed at a rental here</a>) and made calls to radio stations to inform the public of the then asbestos dangers we will face due to the Blue Mountains fires. At the time, the insurance companies were requesting owners of the burnt out properties to go to their site and photograph their homes. I made a call and alluded to the imminent dangers of such a  request; the primary factor being the simple reason that the asbestos sheeting in the burnt out homes were compromised and had turned to dust, therefore making it highly toxic.
Similarly, there are a large number of leased residencies approximately 230,000 dwellings of similar nature to the homes that were burnt out in the bush fires. Mainly weatherboard homes built prior to 1970’s. Asbestos sheeting is okay if left alone and not compromised by; drilling into it, breaking it, driving a nail through it or cutting and grinding it. Yet, when we inspect properties mainly in the western suburbs, there is an alarming abundance of homes which have the above defects, notes my good friend David Piva from Jims Property Inspections.
Why are the dangers around these dwellings not taken care of? Why are there no national incentives by way of “government funded grants” for landlords to be assisted with the remediation of all asbestos sheeting where tenants are living without knowing of the dangers they are surrounded by?
The picture below was taken at a rental in Sydney. The shed at the back left of the photo shows where the fibro (asbestos) sheeting has broken off leaving the material of the shed (the darker colour) exposed. This leaves a substantial danger to the tenants.
<img src="/images/stories/2013/11/25/asbestos-nov-25-three.jpg" alt="asbestos-nov-25-three" height="402" width="470">
<img alt="asbestos-nov-25-one" height="173" width="230" src="/images/stories/2013/11/26/asbestos-nov-25-one.jpg"><img alt="asbestos-nov-25-two" height="173" width="230" src="/images/stories/2013/11/26/asbestos-nov-25-two.jpg">
Asbestos is a silent-killer and the contamination may not be evident if a person is affected for upwards of 17 – 50 years on. There is a real danger and this need to be addressed now - not tomorrow.
There are children playing in asbestos contaminated backyards, people showering in asbestos contaminated bathrooms and people cooking in and around asbestos contaminated kitchens. Yes, you read correctly. Any home built prior to 1987 has asbestos in some form or another in the wet areas; including bathrooms, laundries, kitchens and toilets. Do I have your attention now?
You wouldn’t live under these conditions, so why are we exposing tenants that don’t know any better to the dangers we ourselves try and avoid?
What is asbestos and where is it found?
{qtube vid:=I7L46PnHXYU}
To find out more go to <a href="https://www.asbestosawareness.com.au/" target="_blank">www.asbestosawareness.com.au</a>.
 
<hr>
 Edwin Almeida is managing partner and licensee-in-charge of <a rel="nofollow" target="_blank" href="https://www.just-think.com.au/">Just Think Real Estate</a>.
 
 
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Asbestos is a silent killer and our ignorance is putting people in danger

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Stone lions at the entrance of a home are supposed to guard against evil spirits.

Last weekend the auction crowd at a Georges Hall offering watched as confident bidding prized a $1,325,000 sale through Themy Panagiotidis at LJ Hooker Auburn.

{yoogallery src=[images/stories/2013/11/29/geo]}

The 5 Oak Drive property (pictured above) sold through auctioneer, Rob Trovato at Auction Services was a six bedroom double brick residence set on a 685 square metre block. The Georges Hall record stands at $1.5 million since last year.

There were statues everywhere, but outside the front door of the house stood a tall pair of guardian lion statues, which piqued the interest of our property contrarians Jonathan Chancellor and Margie Blok. This week they consider whether lion statuary is coming back into fashion.

<img alt="georges-hall-nov-29-one" height="283" src="/images/stories/2013/11/29/georges-hall-nov-29-one.jpg" width="470">

HE SAID: A CONDITIONAL YES

Why stop at jungle lions? Surely it's timely to get two Pixiu statues guarding the entrance. Pixiu is the Chinese mythical creature that resembles a winged lion considered to be protectors and also possessing mystical powers of drawing wealth. It is said to have a voracious appetite towards gold and silver.

The statues of a Pixiu are commonly found on the four corners of the roofs of houses—usually houses of important people such as the emperor. One cannot touch the face and head of the Pixiu, because the touch from an ordinary person would ruin their wealth.

Fierce looking with large fangs for attacking demons and evil spirits, the Pixiu has a fat body which indicates a full stomach loaded with unlimited amounts of good fortune.

A Pixiu myth says the creature disregarded a law of heaven. And so the Jade Emperor reproached it by restricting its diet to gold, and then prevented the creature from defecating. Hence, Pixiu absorb only gold, but cannot expel it.

I've actually rarely seen a pixiu, with just the one sale of recent times when a house at Sunnybank Hills, Queensland was sold for $831,000, a gain on the $650,000 price paid by the Wu family in 2004.

But my favourite classic lions were at Loombah, the 1879 Hunters Hill residence sold in 2000 through Ward Partners agent David Ward in conjunction with Martin Schiller. The sandstone Georgian mansion, set on park-like lawns and gardens high above the Parramatta River, was sold by the sand merchant and horse racing enthusiasts John Cornish and wife Pam. With rich cedar joinery, ornate mantels, soaring ceilings, shady verandas, fine English curtains and antique Waterford chandeliers, the property takes its name from the Aboriginal word for steep banks, having been built for surveyor and lithographic draftsman Arthur Stopps. I wonder are they still insitu?

[smartcode_project:default project_id=90140]

SHE SAID: YES

Lions are the king of outdoor statuary and fashionable from time immemorial – or to be more exact, for more than 3000 years when carved stone sphinxes (statues of a lion’s body with a human head) lined the road from Karnak to Luxor in Egypt - these statues remain a highlight for modern tourists.

Of course in China, pairs of guardian lions have been popular since the Han dynasty (206BC-220AD).

In Australia, lion statues standing sentinel at the entrance to a home have been popular for decades.

My favourite pair of lions graced the front path of a grand Queenslander house at Crescent Road, Hamilton in Brisbane. Named Benson &amp; Hedges by the owners of the property, the white painted lions (lying regally on plaster plynths) were considered part of the family.

Sadly, after the house sold for $3.5 million in 2006, the statues disappeared during renovations.

The lions are best not located at the front fence, <a href="https://www.realestate.com.au/property-house-nt-karama-112591355" target="_blank">otherwise they look caged</a>, as apparent at this Northern Territory home.

<img alt="karama-nov-29-one" height="217" src="/images/stories/2013/11/29/karama-nov-29-one.jpg" width="470">
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Lions at the front door! Are lion statues making a regal comeback?

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Overseas Asian buyers in the Gold Coast accounted for a quarter of all sales in October for Ray White Surfers Paradise, clocking up $21.5 million over 46 sales.
Most buyers came from China with additional interest from Malaysia and Singapore.
Most sales were close to universities and schools or central to tourist hubs of Surfers Paradise and Broadbeach.
The group is currently in negotiations for a further $200 million in sales to Asian buyers, including a number of development sites.
Chief of Ray White Surfers Paradise Andrew Bell says the lifestyle of the Gold Coast attracted Asian buyers ahead of cities like Brisbane.
“Lifestyle is also a factor and is probably the main reason the Gold Coast is outstripping Brisbane’s performance in attracting Asian buyers,” Bell says
“A large proportion of Asian buyers also invest with a view to sending their children here to attend university, college or an English language institution.
“Many Australians mistakenly think Asian buyers will pay a premium for property which is rarely the case, but the great benefit to sellers is they are cash purchasers who aren’t dependent on bank finance or valuations.”
There were a number of sales to Asian buyers in high-end developments including the loss-machines <a href="https://www.propertyobserver.com.au/queensland/hilton-surfers-paradise-resale-price-collapse-for-but-one-exiting-property-investor/2013082164115">Hilton Surfers Paradise</a> and <a href="https://www.propertyobserver.com.au/news/poor-fortune-for-those-who-went-to-the-oracle-on-the-gold-coast/2013082664548">Oracle</a> as well as The Glades at Robina and The Address at Sanctuary Cove.
RELATED READING: <a target="_blank" href="https://www.propertyobserver.com.au/news/why-australia-must-deepen-its-asian-investment-relationships/2013112366455">Why Australia must deepen its Asian investment relationships</a><a target="_parent" href="/news"> Asian investors keen on Australian inner-city units: Peter Chittenden</a>
awalsh@propertyobserver.com.au 
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Asian buyers make up a quarter of buyers in Gold Coast

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For more than two decades I’ve been approached by people who want to work for me and who want to involve me in their business plans. During this time I’ve noticed that the people I want to be involved with are not just ‘successful’ in the material sense, but they have what I call the 'psychology of achievement'. That is, the ones who I want to talk further with have a way of thinking, a way of being.
Have a look at some of these observations and think about how they can be applied to your own circumstances.
<ol start="1">
<li>
Team builder: successful people think in terms of building teams of other achievement-oriented people, rather than trying to be the ‘lone genius’. This entails putting your ego on the backburner because you will always be trying to attract people who are smarter than you and who have a degree of their own mental autonomy. This means you have to have an eye to the medium-term goal, not the short-term ego-victory.
</li>
<li>
Strategist: the people who achieve the most in life never let tactics overwhelm their strategy. An example is Sir Richard Branson, whose fight to create the Virgin Atlantic airline saw so many tactical twists and turns, against so many powerful enemies, that many people would have become demoralised. Branson is an embodiment of this motto: tactics serve the strategy, not the other way round.
</li>
<li>
Principles: look at the people who seem able to cope with change and deal with set-backs. Invariably they rely on principles rather than following or imposing rules. Applying principles to ever-changing life is more efficient than setting rules and trying to shoe-horn the world into them. It’s also an effective way of managing your partners and smart employees.
</li>
<li>
Learner: the high-achievers of this world have a universal response to a hole in their knowledge. They find someone who does know, they ask, and they listen. Or, they sign up for a course, do a degree, go listen to a speaker at a conference. One of the most important aspects of the psychology of achievement is to avoid being a know-it-all. No one knows it all.
</li>
<li>
Networks: just as they build good teams in their organisations, achievement-oriented people develop broader peer networks from which they can glean experience and know-how. Two caveats: networks only work when you put in as much as you take out; and networks are never about name-dropping. They are mutual support-systems.
</li>
<li>
Energy: this might be the most important component of a psychology of achievement. You have to give a damn. Life unfolds in the moment, not in a spreadsheet or a business plan or a bank statement, which are all just snapshots of some other moment. High achievers understand this sense of urgency which is why they seem to be on the go most of the time.
</li>
<li>
Ideas: ideas change everything, because ideas are everything. Write them down, test them, train yourself to have more. Ideas are currency.</li>
</ol>
 
<hr>
Mark Bouris is executive chairman of <a href="https://www.ybr.com.au/" rel="nofollow" target="_blank">Yellow Brick Road</a>, a financial services company offering home loans, financial planning, accounting and tax, and insurance.
You can contact Mark on <a target="_blank" href="https://twitter.com/markbouris" rel="nofollow">Twitter</a>.
 
<ol start="1"></ol>
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The psychology of achievement: Do you have what it takes?

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Foreign investment has been a key issue in national policy debate. Surging levels of foreign investment have provided a fillip to the Australian economy during the <a target="_blank" href="https://www.rba.gov.au/publications/bulletin/2009/nov/pdf/bu-1109-1.pdf">global financial crisis</a>, and have been instrumental in <a target="_blank" href="https://www.propertyobserver.com.au/https://www.rba.gov.au/publications/bulletin/2013/mar/6">financing the resource boom</a>.
However, it has also caused a number of political controversies, particularly over the impact of Chinese <a target="_parent" href="https://www.tandfonline.com/doi/abs/10.1080/10357718.2011.563779#.UoVsrPlmh8E">state-owned enterprise</a> investments and the sensitive issue of foreign investment in <a target="_blank" href="https://theconversation.com/why-not-let-agriculture-benefit-from-foreign-investment-19433">agricultural land</a>. Such has been the attention that no fewer than <a target="_blank" href="https://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Economics/Completed%20inquiries/2010-13/foreignacquisitionfarmland2011/index">three</a> <a target="_blank" href="https://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Economics/Completed%20inquiries/2008-10/firb_09/index">Senate</a> <a target="_blank" href="https://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Rural_and_Regional_Affairs_and_Transport/Completed%20inquiries/2012-13/firb2011/index">inquiries</a> have been launched into foreign investment issues in recent years.
But a major finding of the <a href="https://www.murdoch.edu.au/Murdoch-Commission/">First Murdoch Commission</a> is that while Australia is relatively successful in attracting foreign investment overall, its investment ties with Asian partners remain relatively under-developed.
Commission of inquiry
Launched in early 2013 by Murdoch University, the First Murdoch Commission is an independent commission of inquiry into Western Australia and Australia’s role and relationship with the Asian region. Its final report, entitled <a target="_blank" href="https://www.murdoch.edu.au/Murdoch-Commission/Final-Report/">Western Australia and the evolving regional order: Challenges and opportunities</a> was launched in Perth this week by WA Premier Colin Barnett.
The First Murdoch Commission’s aim is to investigate how economic interdependence between Australia and Asia could bring mutual benefits to both parties during the coming “Asian Century”. Its report analyses a <a target="_blank" href="https://www.murdoch.edu.au/Murdoch-Commission/Our-themes/">range of issues</a> across the spectrum of Australia’s relations in the region, including the drivers of Asia’s rise, regional institution-building, trade and investment agreements, resource security, and engagement and diplomacy.
One of the key issues identified by the commission was the role of foreign investment, examining the potential benefits it may offer the Australian economy, and its role in supporting the development of economic ties with Asian partners. The Commission found that Australia is arguably not getting foreign investment from the right sources or into the right sectors to fully benefit from the economic opportunities that Asia offers.
Australia’s open door approach
As a small open economy, Australia has relied upon foreign investment to build large-scale, capital-intensive industries. For most of its history, Australia has maintained an “open door” approach to foreign investors, and the Foreign Investment Review Board (FIRB) <a target="_blank" href="https://firb.gov.au/content/_downloads/AFIP_2013.pdf">screens</a> only a small minority of investments over certain size thresholds or in a handful of sensitive sectors. Practically all foreign investments are approved by the government, with only one business investment (the <a target="_blank" href="https://www.smh.com.au/business/swan-rejects-asx-takeover-20110405-1d25e">proposed takeover</a> of the ASX by the Singapore Stock Exchange) rejected in the last decade.
As a result, Australia has performed very well in attracting foreign investment. Australia presently hosts some A$2.2 trillion of foreign investment stocks, and its attractiveness as a site has <a target="_parent" href="https://www.propertyobserver.com.au/https://www.abs.gov.au/ausstats/abs@.nsf/mf/5302.0">steadily grown</a> in recent years, with annual inflows doubling from an average of A$71 billion per annum during 2001-05 to A$150 billion during 2006-2010.
<img style="font-size: 0.8em;" width="470" src="https://c479107.ssl.cf2.rackcdn.com/files/35560/width668/xmq8k8pn-1384828786.jpg">
Distribution of Australia’s inward FDI by source country. Source: The First Murdoch Commission
<figure><figcaption></figcaption></figure>However, the structure of Australia’s foreign investment patterns is arguably out of kilter with its broader economic relationships. At a country level, Australia’s investment ties with Asian partners remain poorly developed. Europe and the US are the major sources of foreign investment (accounting for 58% of current stocks), while Asian partners collectively account for 11%. This is despite the fact that <a target="_blank" href="https://www.abs.gov.au/AUSSTATS/abs@.nsf/ProductsbyCatalogue/A5FB33BD2E3CC68FCA257496001547A1?OpenDocument">67% of Australian exports</a> in 2012 were destined for Asian markets.
On a sectoral basis, the story is similar. One industry – banking and finance – accounts for just over half of foreign investment stocks, with mining accounting for a further 13%. In comparison, many other sectors underperform at attracting foreign investment, particularly manufacturing, agriculture and non-retail services. As these industries will be instrumental in diversifying Australia’s economies ties with Asia beyond resources in future years, this lack of foreign investment is a cause for concern.
The importance of foreign investment links
For a small country like Australia, foreign investment is important for promoting economic growth. Its main – and most discussed – contribution is for financing capital-intensive industries. Australian capital markets are relatively shallow, and companies in large-scale industries (such as mining, infrastructure and construction) often rely on overseas sources of capital to finance investment.
However, foreign investment can also offer several other benefits, which help integrate Australian businesses with partners in foreign countries. One is marketing channels, where foreign investors can help create new export opportunities by opening markets in their home countries to Australia. This is particularly evident in the <a target="_blank" href="https://www.sciencedirect.com/science/article/pii/S0301420712000128">Australian iron ore sector</a>, where many recent Chinese investments have come with “offtake agreements” that guarantee future sales in China to junior companies developing new mines.
A second benefit is technology transfer. Globally, the majority of private R&amp;D is undertaken by multinational corporations, who possess the necessary size, scale and technical capacity to develop new technologies. Hosting investment from these corporations allows an economy to access the technologies they hold, avoiding the need to pay onerous licensing fees. The clean energy industry is emerging as one area where Australia could <a target="_blank" href="https://www.austrade.gov.au/invest/opportunities-by-sector/clean-energy">especially benefit from foreign investment</a>, given its sizeable solar, wind and geothermal endowments.
Third, foreign investment also helps promote integration in global value chains. These are industries in which products are not made in a single country, but stages of production are spread across multiple economies. Global value chains are common in the Asian region, and have become well developed in the textiles, electronics, consumer goods, food and automobile industries.
Foreign investment ties are important in connecting companies within global value chains. A key example is in the auto industry, where exports of the <a target="_blank" href="https://www.stuff.co.nz/southland-times/life-style/9372302/Aussie-Commodore-a-hit-in-the-US">VF Commodore</a> have taken off following a decision by General Motors to market the Australian-assembled vehicle as the Chevy SS in the US.
Recalibrating foreign investment ties
Given these benefits, it is clear that Australia can benefit from a recalibration of its foreign investment ties. Developing investment relationships in Asia would help more closely integrate the economy with increasingly important partners in the region, and create opportunities to diversify inward investment away from the financial and mining sectors. There are a number of strategies government could implement to this end.
First, Australia could better communicate its investment openness to partners in the region. While very few investment proposals are rejected by the FIRB, there remains a perception in the region – particularly in <a target="_blank" href="https://lowyinstitute.org/publications/chinese-perspectives-investing-australia">China</a> – that Australia is restricting foreign investment. More could be done, both by the Commonwealth Government and statutory bodies such as <a target="_blank" href="https://www.austrade.gov.au/Invest/default.aspx">Austrade</a>, to correct such misperceptions abroad.
In certain sectors, there is deep public antipathy towards foreign investment. This is especially true in agriculture, where foreign investment is often opposed as leading to a <a target="_blank" href="https://australianpolity.com/feature/guarding-food-security-in-the-national-interest">loss of national control</a> or being harmful to <a target="_blank" href="https://www.greens.org.au/land-ownership">food security</a>. However, recent research by the <a target="_blank" href="https://rirdc.infoservices.com.au/items/11-173">Rural Industries Research and Development Corporation</a> reveals that foreign investment in Australian agriculture is relatively low, and has a net positive impact on food security. Efforts to increase public awareness of the benefits of foreign investment in agriculture – especially in terms of technology transfer and marketing channels – may help reduce such community concerns.
Finally, Australia might also explore intergovernmental mechanisms to promote investment ties in the region. Free trade agreement negotiations – including bilateral deals with <a target="_blank" href="https://www.dfat.gov.au/fta/ajfta/">Japan</a>, <a target="_blank" href="https://www.dfat.gov.au/fta/acfta/">China</a> and <a target="_blank" href="https://www.dfat.gov.au/fta/akfta/">Korea</a>, as well as the regional <a target="_blank" href="https://www.dfat.gov.au/fta/tpp/">Trans-Pacific Partnership</a> – all presently have investment provisions on the agenda. If crafted well, these agreements may help promote regional interest in Australia as an investment location.
 
<hr>
 Jeffrey Wilson is fellow of the Asia Research Centre at <a href="https://www.murdoch.edu.au">Murdoch University</a>.
 
This article was originally published at <a href="https://theconversation.com">The Conversation</a>. Read the <a href="https://theconversation.com/why-australia-must-deepen-its-asian-investment-relationships-20264">original article</a>.
 
 
<img src="https://counter.theconversation.edu.au/content/20264/count.gif" alt="The Conversation" height="1" width="1">
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Why Australia must deepen its Asian investment relationships

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This article is in response to '<a target="_blank" href="https://www.propertyobserver.com.au/hotspots/stafford-blooms-but-four-out-of-five-sam-saggers-brisbane-hotspots-yet-to-show-promise-samsaggers/2013053061795">Stafford blooms but four out of five Sam Saggers Brisbane hotspots yet to show promise</a>'
People ask me, “Were you angry about the article?” My reply is pretty simple: I’m not. The way I see it, it’s the job of a journalist to create and start debate.
So better late than never, I’ve finally found time to reply. If you have not read <a target="_blank" href="https://www.propertyobserver.com.au/hotspots/stafford-blooms-but-four-out-of-five-sam-saggers-brisbane-hotspots-yet-to-show-promise-samsaggers/2013053061795">the article I am referring to</a>, it states that four out of five of my “Brisbane hotspots” are “yet to show promise.” I appreciate the perspective. Brisbane has been underperforming for a while now. Yet one thing that still plays on my mind is that in conventional capitalism, it’s still better to buy during a market low rather than a market high. Thus smart investors are buying up in Brisbane LGA and buying as many properties as they can.
Those smart investors also entered the Sydney market late 2009 when prices were simply capitulating and it was a real buyers’ market. Of course scepticism in 2009 was rife, and investors were defiantly swimming against a tide of media gloom. Now in 2013, some five years later, the Sydney market is boiling hot. Early investors that struck at the bottom in 2009 have already made huge gains and that is now not disputable. It’s easier to look back and wish you had bought than it is to buy when sentiment is against you. Remember, despite the medias best efforts to de-rail property investors, the job of an investor is to avoid buying because of a fad or because everyone else is in “boom” mode. It is the job of an investor to swim against the tide.
In 2006 many property investors launched into Melbourne despite negative press, they received their rewards some three years later as the market boomed in 2009 and 2010.  See, investing is a game of courage and a game of patience. It’s not for the faint hearted, that’s for sure.
The article is right; Brisbane LGA suburbs did not match the growth of Perth and Sydney.  But is it all doom and gloom? I personally think it’s a great buying market and I personally have invested there. I am confident in my investments already and the best part is that the market growth upside hasn’t even started.
Let’s take a look at two properties I have bought in the last 18 months in Brisbane.
My first buy was a second-hand one-bedroom unit in the suburb of <a href="/news">New Farm</a>, Queensland. It is a highly sought after suburb due to its picturesque streets and because it’s located only 2 kilometres east of the Brisbane CBD on the river. It boasts the popular cafe, bar and restaurant strips of James and Brunswick Streets, and has excellent transport infrastructure in place with regular Ferry and Citycat services, as well as several bus routes. As unit prices are sub-$500,000 and the median house price is over $1 million, units are extremely attractive for home owners and investors alike. Growth drivers included:
<ul>
<li>
Supply and demand;
</li>
<li>
Transient population growth; and
</li>
<li>
Demographics.
</li>
</ul>
So what did I buy? I managed to get a great deal due to the soft conditions. I secured the recently refurbished one-bedroom unit for $280,000. Seems cheap? Well, I agree! It rents for $400 a week, which is a 7.4% rental yield. Of course, once the Brisbane market takes off, I can foresee that the unit will reach a value of $400,000 – where I’ll make a small win for my bravery of buying at the bottom of the market cycle.
My second purchase was in <a href="/news">South Brisbane</a>, Queensland. Without doubt the rental yields in South Brisbane are the best for an inner city suburb anywhere in Australia. Located within 300m of the Brisbane CBD. The suburb is a mecca for students, executives and the cities elite. It is a cultural hub of Brisbane. With some of the best award winning restaurants, the museum of Modern Art, access to train lines and amenities a plenty. With over 30,000sqm of commercial office space and some of the largest big name commercial tenants in the country, the residential market is tight. In 2007, there were 17,000 office workers in South Brisbane and 900 apartments. In 2012 there are 30,000 office workers and 1,100 apartments. The rents are some of the best in the city with yields pressing 6.5% if you buy well. There aren’t many locations left in Australia today where you can buy so close to a capital city at an affordable rate. This alone makes South Brisbane a standout market. Nicknamed “Brisbane’s Greenwich village”, growth drivers include:
<ul>
<li>
Supply and demand;
</li>
<li>
Yield variation;
</li>
<li>
Transient population growth;
</li>
<li>
Macroeconomics;
</li>
<li>
Infrastructure; and
</li>
<li>
Demographics.
</li>
</ul>
So what did I buy? Well I a decided to buy a brand new unit. I actually bought it off-the-plan and paid $440,000 all up that included some furniture. I rented the property furnished from day one, its current rent is $600 per week and the Defence Force is the tenant. What a formidable return, wouldn’t you agree? Actually both these properties are yet to really perform from a growth aspect. But I’m getting $1000 per week for two properties in two great suburbs, and have paid in total $720,000. That’s a 7.2% return on my investments and I’ve done it in Australia’s third largest city without leaving the 3 kilometres ring of the CBD!  I’m not financially stressed either, because the rents pay my mortgages and it doesn’t cost me anything to hold the properties.
I don’t know about you but I think I have bought really well. So why does the article state they're yet to show promise? And why did I pick areas where the median didn't perform?
What I can tell you is this:
 
Smart Property Investment magazine was doing a property cycle report on Brisbane and asked me to identify suburbs that were likely to represent the best buying opportunities in 2012. At no point did I refer to these areas as ‘hotspots’. I worked with the writer to come up with five areas that fit his criteria. The writer required five suburbs within 10 kilometres of the CBD with properties available for under $400,000. I did express that they were the best buying opportunities available at that time, in that area, for under a certain price – and I still stand by what I said.
I know investors can still buy well and still buy at the bottom of the market in these areas. And if agent interest is anything to go by, I think we are starting to see the winds of change finally creep into the Brisbane market. There is definitely a new air of confidence and agents are becoming increasingly confident as sales volumes begin to surface.
Real estate is a long-term wealth creation strategy, and you can’t expect overnight success. I suggested a market high in 2016-17, which is still three to four years away. I did suggest a double-digit price growth but I did state it would be over a three year time period. Again, as it’s only been just over a year since the article was published and I’d love to revisit this discussion in 2016. In truth neither the article nor I can win this debate, at least not for a few years yet. One thing that is certain though is the way data is reported is often very different to what is happening on the street.
Let's explore:
Michael Matusik published an article on Property Observer commenting on <a href="https://www.propertyobserver.com.au/residential/residential-property-commentary-needs-to-focus-on-sales-volumes-as-well-as-prices-michael-matusik/2013062362542" target="_blank">the inaccuracy of median property prices</a> for judging realistic investment returns. Matusik writes, “Far too much commentary about the residential property these days focuses on price. Very little is actually said about sales.” I completely agree.
Matusik sums it up nicely when he says, “Investors, especially, should pay little or no attention to median or average prices.  It’s sales volumes that are really important.” Well, that’s true and I agree with Matusik, if you are looking for a hot market. Sydney today has massive sales volumes and regardless of the median price, the market is surging. The more sales volume activity, the more demand, the more growth. Would I buy in Sydney now? Well, in truth I don’t have to. I bought three properties over the past four years in Sydney and have done well. Again, primarily using bottom of the market buying strategies.
When will Brisbane sale volumes take off?  Well, as an early investor into that market, I can share with my co–investors, it is not a matter of if they will, but when! One thing I think we can all agree on is, it is smarter to buy in a market low than when the market is high. Brisbane is inexpensive right now and low. If you don’t believe me about the theory, perhaps then Mark Bouris can help win this argument with his buying advise.
To quote Mark Bouris, from his article '<a href="https://www.propertyobserver.com.au/residential/when-is-the-best-time-to-buy-property-mark-bouris-markbouris-ybrwealth/2013060762048" target="_blank">When is the best time to buy property?</a>', “Close followers of house prices are often investors who look for total return on their properties, which combines rental yield and capital appreciation. This can be a good test of overall property health.”
Today Brisbane exhibits strong yields, combine that with expected growth and I think the debate will soon be over. Brisbane LGA and its many inner suburbs, including the ones named in the article, are absolute opportune investment areas and just like Mr Bouris says, once you combine high yields and capital appreciation you have a very healthy property market.
Growth will happen. Brisbane has too much right going for it for it not to.
 
<hr>
 Sam Saggers is CEO of<a href="https://www.positiverealestate.com.au/ME2/Sites/Default.asp?SiteID=697F1E57F8A54C7F9582C3C49417EEC4" target="_blank" rel="nofollow"> Positive Real Estate.</a>
 
 
 
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