Repeat buyers are one of the strongest measures of confidence in any apartment development.

At <a href="https://www.apartments.com.au/new-apartments/era-newcastle-west-124-126-bull-street-newcastle-west-nsw-2302">ERA</a> in Newcastle West, some purchasers are returning to <a href="https://www.apartments.com.au/developers/gwh">GWH</a> after living at the developer's One Apartments. Their decision to purchase again was driven by the quality of life they found after moving into their first GWH home.

Keith Wilton had spent years living in a house in East Maitland before deciding it was time for a change. Apartment living had always been on his radar, but he was selective about what he wanted.

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"I had some boxes I wanted to tick," he says.

Keith points to the open-plan design, generous outdoor areas and considered inclusions as key reasons One Apartments worked for him.

“One of those things was a nice indoor open plan area, but also I wanted a nice outdoor open area that I could entertain on in summer or Christmases or birthdays,” he says.

He also found value in the smaller details, from integrated appliances to shared resident spaces including the pool, cinema and rooftop areas.

[smartcode_project:default project_id=135096 project_image_fid=356818]

After comparing several developments, he chose One Apartments because of GWH's longstanding local reputation and his own experience working with the developer on a commercial project more than a decade earlier.

"I knew that they were local, that the quality of the build was going to be up there. I'd looked at other apartment complexes around and close by, and I just knew that here was a better decision location wise."

Today, Keith says the move has completely changed how he experiences Newcastle.

"I enjoy living in this location because it's more of a lifestyle change. That Newcastle city living where you can walk to restaurants and bars and even beaches and parks and even shopping across the road."

[smartcode_project:default project_id=135096 project_image_fid=356828]

Beyond the location, he says it's the sense of community that has surprised him most.

"Everyone loves living here because they chose to live here, but everyone looks out for each other. It's a real great community feel here."

For Aimee and Lyle Goodman, the journey started almost by chance.

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The couple happened to be having coffee in Newcastle when they noticed the site where One Apartments was about to begin construction.

"We were aware GWH was planning a development," Aimee says. "We made one phone call and things moved pretty quickly after that."

As busy business owners, they initially thought apartment living would simply reduce the maintenance that came with larger homes. Instead, it fundamentally changed how they spent time together.

"We actually catch up more as a family now," Aimee says.

"We've had homes with big yards and lots of space, but everyone ended up in different rooms. Here we'll have dinner together, the kids can play, and we spend far more quality time together."

[smartcode_project:default project_id=135096 project_image_fid=356829]

Lyle says their confidence came from GWH's reputation within Newcastle's building industry.

"I know people who've worked across different apartment projects, and whenever GWH came up the feedback was always the same. They're rock solid. They're quality."

That confidence only grew throughout the buying process.

"One of the things that really impressed us with GWH was the whole process, was the communication," Lyle says. "It was consistent, it was regular, there was no problem if we had some weird questions, there was no problems in getting answers."

[smartcode_project:default project_id=135096 project_image_fid=351104]

Aimee says one moment stood out.

"The project actually finished on time. We realised we needed to hurry up and sell our house because everything was happening exactly when they said it would."

The positive experience at One Apartments ultimately gave all three buyers the confidence to purchase again with GWH, this time at ERA.

Their confidence reflects what many buyers are seeking in today's apartment market. Location remains important, but so too does certainty around delivery, quality and long-term liveability.

[smartcode_project:default project_id=135096 project_image_fid=356822]

ERA builds on those foundations with 280 one, two and three-bedroom apartments across two landmark towers in <a href="https://www.apartments.com.au/developments/newcastle-west-nsw-2302">Newcastle West</a>.&nbsp;

Designed by <a href="https://www.apartments.com.au/architects/fk-australia">Fender Katsalidis</a>, the project will include more than 2,000 square metres of resident amenities, including a resort-style pool, gym, sauna, private cinema and rooftop entertaining spaces overlooking the harbour and coastline.&nbsp;

The development is also within walking distance of the Newcastle Interchange, Honeysuckle, Darby Street, the harbour foreshore, restaurants, retail and the city’s beaches, continuing the walkable lifestyle that existing GWH buyers say has transformed how they live.

[smartcode_project:default project_id=135096 project_image_fid=356826]

For Keith, the appeal remains straightforward.

"You feel at home even before you've moved into your home."

For Aimee, the change is measured in time.

“I just felt like I had more time,” she says.

[smartcode_project:default project_id=135096 project_image_fid=351102]

Construction at ERA is now underway, with more than half of the residences already sold and limited two and three-bedroom apartments remaining in the East Tower release. Priced from $980,000 for two-bedroom residences and $1.46 million for three-bedroom residences, buyers can secure an apartment with a 10 per cent deposit, with premium homes offering ocean views from Level 8 and harbour views from Level 10.

ERA is also backed by Resilience Insurance's 10-year Latent Defects Insurance policy, providing protection against structural or waterproofing defects for 10 years after completion. The project is anticipated to be completed in early 2028.

[smartcode_project_cta:default project_id=135096]

Joel Robinson

From ONE to ERA: Why buyers are choosing GWH again in Newcastle West

Virgate Property Group is preparing to commence construction of Verdé, its new apartment development in Melbourne's Arts Precinct at Southbank, following a strong run of sales that has seen more than half of the project's 173 apartments secured.

Verdé has attracted a broad mix of first home buyers, owner-occupiers upgrading from nearby inner-city suburbs and investors, with younger owner-occupier couples aged between 28 and 45 accounting for the strongest enquiry. Many are already living in Southbank, South Melbourne, Albert Park, Port Melbourne, South Yarra and the CBD.

"Verdé is located in one of the most desirable pockets of southern Melbourne," Blair Property Group Director Darren Blair, who is managing sales at Verdé, said.

"It's within walking distance of the Arts Centre, Royal Botanic Gardens, Albert Park Lake, and Southbank's restaurants and retail. It's a great lifestyle location with strong amenity and liveability, which made it a very attractive choice for the project."

[smartcode_project:default project_id=4661 project_image_fid=372549]

Virgate was already familiar with the precinct, having previously delivered the successful Domain House development in neighbouring South Melbourne. That experience gave the developer confidence to acquire the Coventry Street site and continue expanding its presence in Melbourne's inner south.

"We had been keeping an eye on the site and the broader precinct for a few months before deciding to move forward with the acquisition," Virgate said.

The project was ultimately secured in 2020 following feasibility studies, planning assessments and due diligence, with the brief centred on delivering "a high-quality, considered design that feels both refined and fit for purpose."

[smartcode_project:default project_id=4661 project_image_fid=314259]

Designed by <a href="https://www.apartments.com.au/architects/bruce-henderson-architects">Bruce Henderson Architects</a>, Verdé comprises 173 one, two and three-bedroom apartments priced from $599,000. The architecture is distinguished by a faceted glass façade that responds to both the site's outlook and Melbourne's changing light conditions.

According to Bruce Henderson Architects, the coloured glazing gives the building a distinctive identity while also providing privacy and solar shading, with residences oriented to capture views across the bay, city skyline and surrounding parklands.

Inside, <a href="https://www.apartments.com.au/interior-designers/designoffice">DesignOffice</a> has created interiors focused on natural light, efficient planning and enduring materials. Apartments feature engineered oak flooring, natural stone benchtops, floor-to-ceiling glazing and SMEG appliances, while a restrained material palette aims to complement the expansive outlooks rather than compete with them.

[smartcode_project:default project_id=4661 project_image_fid=372550]

Resident amenity has also been designed around everyday functionality rather than occasional use. Facilities include a concierge-serviced lobby, residents' lounge with fireplace, library and co-working space, gym, terrace garden with barbecue facilities, ground-floor café, and package delivery management.

The project's location continues to be one of its strongest drawcards. Positioned on Coventry Street, Verdé sits within walking distance of the National Gallery of Victoria, Arts Centre Melbourne, Royal Botanic Gardens and Albert Park Lake, while Southbank's dining precinct, Sturt Street trams and the new ANZAC Station are all nearby. The surrounding education catchment also includes Melbourne Grammar, Melbourne Girls Grammar, Mac.Robertson Girls' High School and several major university campuses.

The sales team says buyers have responded particularly well to the combination of location, design quality and long-term liveability.

"They're responding really positively to the quality of the design, premium resident amenities and the uninterrupted views. Many also appreciate the location and how connected it is to everything they need."

The ability to secure stamp duty savings before completion has also been a key factor for purchasers, alongside the opportunity to personalise finishes ahead of settlement.

With construction set to commence soon and more than half the apartments already sold, Verdé enters its next phase as one of the Arts Precinct's more established apartment developments, offering remaining buyers an opportunity to secure a residence before construction advances further. Expected completion is scheduled for late 2027.

[smartcode_project_cta:default project_id=4661]

Virgate's Verdé Southbank moves toward construction as sales fly past halfway stage

Downsizer-focused apartment development Kooyongkoot in Hawthorn has been recognised at the 2026 Better Future Melbourne Design Awards, taking home Gold and Silver awards in two categories.

<a href="https://www.apartments.com.au/new-apartments/kooyongkoot-hawthorn-1-kooyongkoot-road-hawthorn-vic-3122">Kooyongkoot</a>, currently being delivered by developer PQD and designed by Cera Stribley, received Gold in the Interior Design – Proposed category and Silver in the Architecture – Proposed category.

The dual recognition reflects the design approach behind the boutique development on prestigious Kooyongkoot Road, where the focus has been on creating homes for downsizers seeking the space, quality and functionality of a detached house within a low-rise apartment building.

Rather than maximising apartment numbers, <a href="https://www.apartments.com.au/developers/pqd">PQD</a> and <a href="https://www.apartments.com.au/architects/cera-stribley-architects">Cera Stribley</a> limited the development to just 18 residences, allowing for larger floorplans, greater privacy, generous landscaping and expansive communal spaces.&nbsp;The majority of the apartments also benefit from corner aspects, allowing for dual sources of natural light.

Now around 70 per cent complete and on track for completion in November 2026, Kooyongkoot will comprise a mix of garden residences, ter​race apartments, sub-penthouses, and is crowned by two half-floor penthouses with direct lift access and private rooftop terraces.

[smartcode_project:default project_id=102717 project_image_fid=355297]

The Silver Award for Architecture recognised the way the building responds to its prominent corner position at the ent​rance to Hawthorn's Scotch Hill precinct, one of Melbourne's most established residential neighbourhoods.

Rather than competing with the grand homes that line Kooyongkoot Road, the architectural approach focused on restraint and longevity, using curved brickwork, generous landscaping and carefully considered proportions to integrate with the existing streetscape.

"The form feels fluid and timeless, as though shaped by the landscape itself – architecture that belongs, rather than competes," said Chris Stribley, Co-Founder and Managing Principal of Cera Stribley.

The judging submission also highlighted practical innovations throughout the building, including lift cores servicing only nine homes each, a central landscaped lightcourt designed to bring daylight and ventilation into the building, and fully enclosed private storage rooms with lighting, power and shelving to better accommodate residents transitioning from larger family homes.

[smartcode_project:default project_id=102717 project_image_fid=355293]

The Gold Award for Interior Design recognised the project's focus on long-term liveability rather than display-home aesthetics.

According to the awards submission, the interiors were designed from the inside out, prioritising how homes would function over decades of daily use through generous proportions, practical storage, durable natural materials and flexible layouts.

The specification includes natural stone throughout, upgraded acoustic glazing, V-ZUG appliances and fully enclosed storage rooms, alongside an amenity offering focused on wellness, entertainment and everyday convenience.&nbsp;

Residents will have access to a gym and yoga studio, a wellness centre featuring traditional and infrared saunas, a cold therapy shower and treatment room, as well as a residents' lounge and golf simulator/cinema room for entertainment.&nbsp;Kooyongkoot has also considered the everyday convenience of its residents by offering a private carwash and pet wash facilities on site as well as dedicated parcel lockers and oversized fully enclosed storage rooms.&nbsp;

[smartcode_project:default project_id=102717 project_image_fid=355303]

The project's attention to detail has already resonated with buyers. Earlier this year, Kooyongkoot recorded one of Boroondara's highest apartment sales when an $8 million penthouse was purchased by a Melbourne CEO downsizing from a nearby family home.

"Every detail feels deliberate, from the overall design down to the smallest touches," the purchaser said.

"The level of quality and refinement is exceptional, but what really sold it was how liveable it felt... It felt like a place where everything had been considered, not just a luxury building."

[smartcode_project:default project_id=102717 project_image_fid=355304]

Sustainability also formed a key part of both award submissions. Kooyongkoot is targeting a minimum 7.5-star NatHERS rating across all residences, supported by passive design principles, high-performance glazing, EV charging infrastructure, water reuse systems and a wellness model focused on lower-energy dry facilities rather than pools and large wet areas.

Located within walking distance of Scotch College, Methodist Ladies' College, Koo​yong Lawn Tennis Club, Aubur​n Village and Camberwell Junction, Kooyongkoot continues to target owner-occupiers looking to remain in Melbourne's inner east without compromising on space or quality. A limited selection of two, three and four-bedroom residences remains available, with prices starting from $1.9 million.

[smartcode_project_cta:default project_id=102717]

Kooyongkoot wins Gold and Silver at Better Future Melbourne Design Awards

New apartment supply has become increasingly constrained across <a href="https://www.apartments.com.au/developments/parramatta-nsw-2150">Parramatta</a> in recent years, with fewer projects progressing through to completion as development conditions have become more challenging.

It makes <a href="https://www.apartments.com.au/developers/novm">NOVM</a>'s 2021-completed <a href="https://www.apartments.com.au/buildings/the-lennox-parramatta-12-phillip-street-parramatta-nsw-2150">The Lennox</a> one of the most recently completed residential towers on the Parramatta River, and among the newest apartment developments in Sydney's second CBD.

With the project largely completed before the sharp escalation in construction costs and inflation following the pandemic, The Lennox is now offering pricing that would be difficult to replicate in a comparable new development in Parramatta today, or across much of Western Sydney.

The majority of the 413 apartments at The Lennox sold before and shortly after completion. A limited release of the remaining apartments has recently been brought to market by capital partner <a href="https://www.apartments.com.au/project-marketer/equitifund-group">Equitifund</a>, with entry-level pricing from $700,000 and two-bedroom apartments available from under $1 million.

Rising above the Parramatta River at 12 Phillip Street, The Lennox comprises one, two, three and four-bedroom apartments, appealing to first home buyers, young professionals, families, downsizers and interstate investors seeking a completed apartment in one of Australia's fastest-growing economic centres.

[smartcode_project:default project_id=5743 project_image_fid=372394]

Rather than positioning Parramatta as an alternative to Sydney's CBD, Equitifund believes the city has reached a point where it stands on its own merits.

"Parramatta is no longer simply an alternative to Sydney CBD, it's becoming a destination in its own right," Equitifund Executive Chairman Greg Huxley said.

"The Lennox captures that evolution with a level of quality and amenity that's difficult to match at its price point."

[smartcode_project:default project_id=5743 project_image_fid=953]

Designed by <a href="https://www.apartments.com.au/architects/marchese-partners">Marchese Partners</a>, the tower responds directly to its riverfront setting through expansive glazing and open-plan layouts that maximise views across the Parramatta River and city skyline. Interiors feature engineered timber flooring, stone benchtops, stainless steel appliances and floor-to-ceiling glazing, while generous balconies extend the living spaces outdoors.

Marchese Partners says the project was conceived to balance high-quality apartment living with practical, long-term functionality, pairing larger, efficient floorplans with amenities more commonly associated with five-star hotels.

That emphasis continues through the resident facilities, which include a 20-metre rooftop swimming pool, fully equipped gym and wellness spaces, full-time concierge, a residents' lounge, function room, private lifts, secure basement parking and rooftop communal areas overlooking the Parramatta River. Ground-floor boardwalk retail and dining further activate the riverfront and integrate the building into the surrounding public realm.

[smartcode_project:default project_id=5743 project_image_fid=925]

Australian housing and finance group Equitifund has secured the remaining apartments, believing there are few completed apartment opportunities in Parramatta that offer the same combination of location, amenity and pricing.

Equitifund National Sales Director Ben Hamblett says buyers are increasingly recognising that premium apartment living no longer needs to come with Sydney CBD pricing.

"The Lennox is where aspirational living becomes attainable," Hamblett said.

"Wake to river and mountain views, step into Sydney's Second CBD, and arrive home to resort-calibre amenities, all without the harbour price tag."

Hamblett says owner-occupiers are also attracted by the convenience of having Westfield Parramatta, Church Street's dining precinct, Parramatta Park, Riverside Theatres, Western Sydney University and major transport connections all within walking distance.

"At The Lennox, lifestyle is not an afterthought, it is the foundation."

[smartcode_project:default project_id=5743 project_image_fid=5374]

The Lennox places residents within walking distance of Parramatta Square, Westfield Parramatta, Church Street Eat Street, Parramatta Station, the ferry wharf, Light Rail, the future Sydney Metro West, Parramatta Park and CommBank Stadium, reinforcing Parramatta's position as one of Australia's most connected metropolitan centres outside Sydney's CBD.

Equitifund says buyers visiting the display suite consistently comment on the quality of the finishes, generous floorplans, river and skyline views, and the walkability of the location. The project has attracted a broad mix of local professionals, upsizers, downsizers, buyers relocating from Sydney's inner suburbs and interstate investors seeking long-term growth opportunities.

That demand aligns with Parramatta's continued evolution as an economic powerhouse. Equitifund Research and Market Insights specialist John Bekiaris says sustained population growth, infrastructure investment and expanding employment opportunities continue to support long-term housing demand across the city.

"Parramatta has evolved from a satellite city into one of Australia's most important economic centres. Population growth, infrastructure investment and employment are all supporting sustained long-term housing demand."

[smartcode_project_cta:default project_id=5743]

The apartment price gap drawing Sydney buyers west

A luxury beachfront apartment at Rainbow Bay has more than doubled in value since it sold off the plan six years ago, setting a new local apartment record in the process.

The three-bedroom apartment in the Flow development on Petrie Street, the first of four new projects locally by Paul Gedoun's S&amp;S Projects, has sold for $7.4 million, after originally selling for $3.27 million when the project launched in 2020.

The seventh-floor apartment, comprising 187 sqm of internal living space and a 54 sqm balcony overlooking Froggies Beach and Snapper Rocks, was purchased by a local family.

The transaction was negotiated by Pezet Matheson director Kerry Pezet and equates to more than $30,000 per sqm.

Pezet said the sale reflected the limited opportunities to buy into the boutique beachfront development.

"The sale highlights the rarity of opportunities within the boutique beachfront development, where residences seldom become available," Pezet said.

"Flow is one of the Gold Coast's most tightly held buildings. Buyers from our database move quickly when residences become available, and achieving an off-market sale at $7.4 million demonstrates the depth of demand for property of this calibre."

<img alt="Flow" data-entity-type="file" data-entity-uuid="c585b206-2130-4eee-a50c-3f27c51a7c70" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-06%20at%208.33.25%E2%80%AFPM.png?VersionId=m3pHRDV62Y3fvN.XQuQHq.52ilTWpRLf" />

Flow was the first of four luxury apartment developments delivered by Paul Gedoun's S&amp;S Projects at Rainbow Bay and was completed in 2023.

Positioned on the beachfront overlooking Snapper Rocks, the residence includes three bedrooms, three bathrooms, a powder room and views stretching north along the coastline towards Surfers Paradise.

Pezet Matheson Residential principal Mitchell Lambert said buyers continued to prioritise quality beachfront apartments in tightly held locations.

"Flow Residences offers a rare combination of elevated beachfront positioning, architectural excellence, comprehensive resident amenity and premium finishes, which is exactly what discerning purchasers are seeking," Lambert said.

"The transaction further reinforces Rainbow Bay's reputation as one of Australia's premier coastal lifestyle destinations, where limited supply and growing demand continue to support strong market performance."

Pezet Matheson originally marketed and sold out Flow off the plan, making the latest transaction a return to one of the project's original buyers.

Paul Gedoun is selling his third project, <a href="https://www.apartments.com.au/new-apartments/radia-rainbow-bay-271-boundary-street-coolangatta-qld-4225">Radia Rainbow Bay</a>, after recently completing, and selling out, <a href="https://www.apartments.com.au/buildings/esprit-217-227-boundary-street-coolangatta-qld-4225">Esprit</a>. He has plans for a <a href="https://www.apartments.com.au/news/qld/first-look-s-s-projects-proposes-88-apartment-wellness-tower-at-coolangattas-boundary-street">fourth building</a>, 88 apartments on <a href="https://www.apartments.com.au/new-apartments/209-213-boundary-street-coolangatta-qld-4225">Boundary Street</a>.

Rainbow Bay apartment doubles in price since off the plan sale during pandemic

Investment

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More than $1 billion in industrial property was sold in Melbourne for the year up to June with private investors accounting for 40% of total sales value.
A total of 648,324 square metres was leased during the same period, according to Savills July 2015 Melbourne Industrial Briefing.
The briefing found $1.47 billion of industrial property was sold in the year to June 2015 , with some investors choosing a “super” Prime category of industrial investment.
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The report noted factors such as capital raising, debt restructuring and the slowing of restrictions to debt finance have led to a return of Funds and Trusts investing in the market. Private investors, attracted by low interest rates and positive returns took a 40% market share of sales.
Owner-occupier purchases amounted to 12% of all stock priced higher than $2 million. The market under $20 million accounts for over half of all sales vale.
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Industrial leasing deals are higher than the decade average with 648,324 square metres leased from 92 deals. The previous year held 497,238 square metres of stock from 82 deals. This result suggests an improvement in conditions from an environment that has been a difficult
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The decade average prior to this year was 598,982 square metres per annum. 
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Melbourne industrial sales to June break $1 billion, rentals hit decade high

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Investorist, Australia’s highly successful online and mobile marketplace for the world’s B2B off-the-plan property industry, has raised $2.5 million to increase its presence in Asia Pacific, United Kingdom and to also launch into the United States
Key technology investor Stuart Marburg, co-founder of Netspace, joins property investor Benni Aroni developer of the Eureka Tower as investors to enable the expansion.
Investorist currently has offices in Melbourne, Sydney, Brisbane, Shanghai, Beijing, London and a presence in Singapore and Malaysia.
The first A Class of capital raising follows the successful seed investment from the Salta Group, the luxury apartment Melbourne developers, in March 2014 when $1.7 million was invested.
The fast growth Australian start-up, featured in the recent Anthill list, is now valued at over $20 million ahead of its second anniversary.
The latest funding comprised 20 individual investors many of whom are current users of the platform.
A number of these key investors have also joined Investorist’s Advisory Board such as Stuart Marburg, co-founder of Netspace, Paul Clarke CEO of ASX-listed Redflex and current chairman of Melbourne Water and director of the Victorian Water Industry Association and Benni Aroni a property lawyer and developer of Melbourne’s Eureka Tower and founder of Watersun Properties.
 Investorist provides residential property developers and real estate agents with real time inventory management and access to global distribution networks. It has quickly become the leading online and mobile marketplace for the B2B off-the-plan property industry.
Founder and CEO, Jon Ellis says off-the-plan property sales account for over one-quarter of all Australian residential property sales.
“These sales are different to existing property sales; they are typically sold as investments, often cross-border and usually sourced for the consumer by an intermediary business or advisor.
"These sales occur prior to advertisements appearing in newspapers or consumer portals.
"Investorist is the only marketplace of its kind to use sophisticated technology to transform a traditionally paper and phone dominated industry,” he says.
Stuart Marburg, current CEO of Message Media, advised he was attracted by technology transforming traditional verticals.
“It is exciting to see a young Australian start-up come up with a unique idea and improve what was once considered a very traditional sector, he said.
Investorist boasts 4,000 current users of the system with more than 20,000 unique searches generated on the platform in June when $500 million in property was transacted through the site, comprising around 1,000 sales, said Jon Ellis.
David Tarascio, CEO investment management at Salta Properties, has joined the Investorist Advisory Board. He commented that double sales of apartments and miscommunication between parties were avoided through Investorist's streamlining.
CEO founder, Jon Ellis launched the website in mid-2013, aged 33 year, with software to manage complex transactions from information exchange through to contract exchange and property settlement.
Investorist’s members are the developers, project marketers and advisors who lead the off the plan property industry. For more information, check out <a href="https://www.investorist.com" target="_blank">Investorist</a> here.
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Expansionary Investorist attracts topline local investors after $500 million sales month

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Despite the usual turmoil along the way and ending on a weak note with Greek and Chinese-related turmoil, 2014-15 provided another year of solid returns for investors who were prepared to move beyond cash. 
Most asset classes had reasonable returns resulting in average superannuation funds returning 9.9%, their third financial year in a row of returns around 10% or more. 
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There’s been plenty to worry about as usual, but..
As always, the worry list over the last 12 months was long with:
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<li>Concerns about the end of the US Fed’s quantitative easing and approaching Fed rate hikes, which has seen bond yields drift higher since their lows earlier this year. </li>
<li>Geopolitical scares regarding Ukraine, the so-called IS and related terror threat and the West Africa Ebola outbreak. </li>
<li>Deflation fears associated with the collapse in oil prices. </li>
<li>Another soft start to the year for US/global growth. </li>
<li>Recurring worries about China &amp; recently its share market. </li>
<li>A renewed soft patch in European economic growth late last year and the return of Greek-related contagion risk this year. </li>
<li>Ongoing concerns about Australia post the mining boom.</li>
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But these concerns have been partly offset by a combination of: 
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<ul>
<li>A delay in rate hikes in the US and further monetary easing globally - notably in Europe, Japan and China. </li>
<li>Assurances that rate hikes in the US will be dependent on further improvement in economic growth and gradual. </li>
<li>Further rate cuts and an ongoing slide in the $A helping drive a pick-up in non-mining economic activity in Australia. </li>
<li>Progress towards another bailout package for Greece and Chinese Government support for its share market. </li>
</ul>
The end result has been an environment of continued but uneven and constrained economic growth with periodic deflationary shocks (low oil prices, Greece fears, the cautious consumer, etc) serving to keep monetary conditions easy (interest rates low) and investors cautious. Despite periodic corrections (eg Australian shares had top to bottom corrections of 9% last September and through April/June), such an environment of continuing growth and easy monetary conditions against a backdrop of reasonable valuations has been good for investment returns. 
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<div class="column">Key lessons for investors </div>
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<div class="column">The past year provides several lessons for investors, notably: </div>
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<ul>
<li>
Turn down the noise – the advent of social media has seen the noise around investing, in particular the constant talk of one problem after another, ramped up. But it’s essential to turn it down if you want to be a successful investor. 
</li>
<li>
Inflation remains missing in action – thanks to a combination of constrained global growth, excess capacity and commodity prices in a secular downtrend thanks to rising supply, the world is deflation prone. This means a continuation of low interest rates and the "search for yield". 
</li>
</ul>
Diversification and active asset allocation are critical – another year of underperformance by Australian shares provides a reminder of the importance of diversifying globally and the uneven/choppy return environment provides a reminder of the importance of asset allocation. 
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<div class="column">What about the macro investment outlook? </div>
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 It is hard to see the outlook for investment markets differing radically from what we have seen over the last few years:  <ul>
<li>Global growth is likely to remain uneven and constrained at around 3-3.5%. While the messy global growth outlook is often seen as a negative, it’s really a good thing. Sure, we don’t want to see a collapse back into recession but the best way to guarantee that would be to see a synchronised surge in economic growth bringing on inflation and interest rate concerns. So let’s hope global growth remains constrained! </li>
</ul>
<a href="/images/2015/07/21/oliver2.jpg">Click to enlarge</a>
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<ul>
<li>Inflation is likely to remain low, thanks to the constrained global recovery leaving spare capacity in place and the secular downtrend in commodity prices. </li>
<li>Commodity prices are likely to remain in a downtrend in response to rising supply. </li>
<li>Growth in Australia is likely to remain sub-par at around 2.5% as the mining boom continues to unwind, offset by improving non-mining activity. Bad for mining and WA but good for home building, retailing, tourism, higher education, manufacturing, farmers and Australia’s eastern states. Some improvement in growth in prospect for 2016. </li>
<li>Global monetary conditions are likely to remain easy. While the Fed is likely to raise interest rates starting later this year, it will likely be gradual but monetary conditions are likely to continue easing elsewhere. Quantitative easing in Europe and Japan is likely to continue well into next year and maybe beyond while Chinese benchmark interest rates are likely to fall below 4%. Another RBA rate cut is 50/50 and rate hikes are unlikely before 2017. </li>
<li>Expect a further rise in the value of the $US, albeit at a more constrained pace, with the $A falling into the $US0.60s over the next 12 months. </li>
</ul>
 The return outlook
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<div class="column">The bottom line is that the world remains in a sort of messy sweet spot for investors. Growth is not flash but okay, inflation is low and monetary conditions overall are set to remain easy. For the main asset classes, this has the following implications: </div>
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<li>Cash and term deposit returns to remain poor. In Australia it’s likely to be 2% or less over the year ahead and bank term deposit rates are pushing down to around 2%. Investors need to decide what they really want: if capital stability is more important than a decent stable income flow, then stick with cash. If not, then consider the alternatives. </li>
</ul>
<a href="/images/2015/07/21/oliver3.jpg" target="_blank">Click to enlarge</a> <img src="/images/2015/07/21/oliver3.jpg" alt="" style="line-height: 1.3em;">
 
Low sovereign bond yields of around 3% or less indicate that the return potential from bonds is low. A move to higher bond yields will mean even lower bond returns. However, unless global growth/inflation rises significantly then any rise in bond yields is likely to be very gradual.
Corporate debt should continue to provide okay returns. A drift higher in bond yields is a mild drag but with continued modest global growth the risk of default should remain low. Hybrid growth assets like real estate investment trusts and listed infrastructure should benefit from the ongoing “search for yield” and modest economic growth driving higher rents. But think 8-9% pa returns rather than double digit.
Unlisted commercial property is also likely to benefit from the “search for yield” and modest growth in rents, with returns around 8-9%. But it’s perhaps less vulnerable to short-term swings in bond yields.
Residential property returns are likely to be mixed with many cities seeing zero capital growth and Sydney slowing to around 8% per annum. Very low rental yields are not good. 
The bull market in shares likely has further to go as: shares are not unambiguously overvalued and are mostly cheap if allowance is made for low bond yields; they are not overloved by investors with various surveys suggesting an ongoing degree of caution; uneven and below-trend growth is extending the economic cycle; and monetary conditions are likely to remain easy for some time. However, volatility is likely to remain with history telling us that the first Fed rate hike can cause corrections (8-9% in both 1994 and 2004).
<a href="/images/2015/07/21/Screen%20Shot%202015-07-21%20at%202.31.38%20PM.png" target="_blank">Click to enlarge</a>
<img src="/images/2015/07/21/Screen%20Shot%202015-07-21%20at%202.31.38%20PM.png" alt="">
 
Within shares, we favour global over Australian shares (unless it’s income you are after) and European and Chinese/Asian shares over US shares. Finally, the continuing downtrend in the $A enhances the case for global shares (unhedged) over Australian shares. 
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 Things to keep an eye on 
</div>
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<div class="column">The key things to keep an eye on over the year ahead are: </div>
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<ul>
<li>
Global business conditions PMIs – these point to constrained growth but a sharp rise or fall could cause problems.
</li>
<li>
When/if the Fed starts to raise rates later this year – with US wages growth being a guide to timing and aggressiveness.
</li>
<li>
The spread of Italian and Spanish bond yields to German yields – a good guide to whether the Eurozone crisis is continuing to fade.
</li>
<li>Chinese economic growth readings.</li>
<li>Whether Australian non-mining activity keeps improving. </li>
</ul>
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<div class="column">Concluding comments </div>
<div class="column">
 Investment returns are likely to slow from the double-digit average of the last few years. And the September quarter is historically a rough one for shares with a likely Fed hike still ahead. But looking beyond near-term uncertainties, the mix of reasonable share valuations, continued albeit constrained global growth, easy monetary conditions and a lack of investor euphoria suggest returns are likely to remain reasonable. 
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<div class="column"><a href="https://www.propertyobserver.com.au/https://plus.google.com/110172465327488162875?rel=author" target="_blank">SHANE OLIVER</a> is head of investment strategy and economics and chief economist at <a href="https://www.ampcapital.com.au/home" target="_blank">AMP Capital</a>.</div>
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soliver-smf6LQXgW9

Can the good investment returns continue? Shane Oliver's worry list

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GUEST OBSERVER
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London is one of the most diverse, globally connected, competitive, high performing cities in the world, on a wide variety of measures.
 We have combined four of the most widely quoted indicators of World City prominence. These measure global connectedness (gaWC), performance and potential (kearney), power (Mori) and global competitiveness (eIu). Together, these create the Savills World City Ranking.
London and New York stand out far ahead of other cities and illustrate how a unique combination of strengths marks them out as global powerhouses. We have dubbed London a ‘polymath city’ for being so pre-eminent in a wide range of aspects of city life.
It might be worth noting, however, that although ranking high economically, London, and indeed the rest of the world cities tend not to rate so high on the ‘softer’ social and environmental issues.
It is also notable that none of the 20 cities rate in the top ten of the Economist’s ‘Liveability Ranking’, for example. Numbeo’s Quality of Life Index 2015 places London in 90th place out of 150 cities, ahead of Paris, Hong Kong, Shanghai, Moscow and Beijing but behind the other 14 cities (only Frankfurt makes it into Numbeo’s top 20).
It would seem that being a top performing world city comes at a price. Pollution can be higher (though London’s is slightly below average), and real estate costs in the 20 cities are significantly higher than in other global cities but, surprisingly, London’s are not among the highest when mainstream housing costs are measured against average household incomes.
This dubious honour belongs to Hong Kong, Beijing, Shanghai, Moscow and Singapore. Traffic congestion and long commutes are another side effect of economic success but London does not fare too badly here, in comparison to other world cities. If Numbeo is to be believed, London’s main downfall in the quality of life rankings (in common with most of the other 20 cities) is that the purchasing power of individuals is low, in relation to average incomes and consumer prices are high.
A rapidly expanding employment base is underpinning a new wave of expansion in London’s office markets. New records were set in the leasing markets in 2014, with 8.2m sq ft leased in the City of London. Reaffirming London’s status as one of the most important global centres for the creative, media, entertainment and tech industries, the capital has seen a general shift in occupier demand from west to east.
This in turn has been reflected in fast-rising office rents. The proportion of office take-up by creative and technology companies in the City of London was 17% in the year to June 2015, the same as the proportion taken by insurance and financial service companies.
However, it is worth noting that the banking sector has started to recover this year, and this means banking and finance companies currently account for 38% of current requirements across central London. A buoyant occupier market underpins record investment – London is the number one destination for cross-border investment into offices globally.
Rapid employment growth puts further pressure on London’s housing market. New housing supply has failed to meet the need and the pressure on living costs has continued to build. House prices in London have risen by 43%, and private sector rents by 19% over the last five years according to the ONS. Investment in transport improvements is essential to open up new parts of the city for housing development. Crossrail, an upgrade to Thameslink services and an extension to the Northern Line, is unlocking new development in the near term.
The focus of London government at present is ensuring that sufficient and affordable accommodation is provided to house London’s growing population. There is concern that a combination of high land prices, low industry capacity and a historic undersupply backlog will continue to thwart these intentions.
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<a href="/images/2015/07/17/london.jpg" target="_blank">Click to enlarge</a>
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Global urbanisation and the focus by people on city living has meant that international investment activity has also been focused in this way. Worldwide, prime city property has appreciated in value but mainstream property has not grown by so much. This is as true of London as any other global city.
The impact of overseas investment by private individuals in world cities seems to have pushed up prices for wealthy people in the prime markets, but not so much for mainstream property in secondary markets.
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London’s prime residential real estate is seven times more expensive than its mainstream housing, compared to New York’s, for example, which is only four times the price. The higher incidence of overseas property buyers in London has created an international market in prime property but London’s mainstream property is about the same price as New York’s.
<a href="/images/2015/07/17/Screen%20Shot%202015-07-17%20at%202.55.41%20PM.png" target="_blank">Click to enlarge</a>
<img src="/images/2015/07/17/Screen%20Shot%202015-07-17%20at%202.55.41%20PM.png" alt="">
At a global level, mainstream London property prices are on a par with Singapore and New York and cheaper than Hong Kong’s (all of these cities have growing populations and constrained land supply). This still makes London one of the most expensive locations in which to buy property globally, but the issue seems to be one of high demand against near-static supply, rather than the weight of money pressing on prime markets.
It is when new development is overly concentrated in prime markets that these supply problems are exacerbated. London has been able to grow the size of its prime stock but has been less successful at growing its mainstream housing supply. London has several possible solutions to its issues of high home prices:
<ul>
<li>Densify and make better use of land, especially in central and transport- accessible neighbourhoods</li>
<li>Open up new areas with new transport infrastructure</li>
<li>Regenerate low-grade and low-density land, both publicly and privately owned</li>
<li>Intensify neighbourhoods by mixing residential into low-intensity retail and workspace uses</li>
<li>Expand beyond political boundaries, a significant proportion of London’s workforce lives outside greater London already.</li>
</ul>
Until most or all of these solutions start to change the supply of housing in London, the city is likely to remain among the world’s most expensive. 
<a href="/images/2015/07/17/Screen%20Shot%202015-07-17%20at%201.49.14%20PM.png" target="_blank">Click to enlarge</a><img src="/images/2015/07/17/Screen%20Shot%202015-07-17%20at%201.49.14%20PM.png" alt="" width="1362" height="713" style="line-height: 1.3em;">
London, unlike many former hosts of the Olympic Games, saw both visitor numbers and spend increase in its post olympic year, a trend that has continued. London is expected to welcome 18.8m international overnight visitors in 2015, and has topped the Mastercard’s global destination Index in four out of five years, except 2013, when bangkok held the lead position. London also topped the rankings for tourist spend at $20.2bn, with a significant chunk of this spent shopping.
London’s world famous shopping streets and its variety of international brands, including home grown ones such as Burberry, have helped to increase international tourist spend. But it has been London’s ability to attract high spending tourists that has really established it as a Global retail destination.
The biggest spenders have been those coming from the UAE and China. They each have an average spend per transaction of over £900 (US$1,400). The fact that China is now the largest consumer market of luxury products globally, with an increasing proportion of this spend taking place overseas, means that they are an attractive target consumer group – particularly for luxury brands.
At present Chinese tourists account for only a small proportion of total overseas spend in the UK. According to official data from the ONS 233,000 mainland Chinese tourists came to the UK last year with a total spend of £559m. This represents only 2.6% of total overseas spend.
In contrast France attracted over 1 million Chinese visitors. The difficulties experienced by Chinese visitors in obtaining visas has been cited as an issue contributing to these lower visitor numbers. Improvements to the visa application process, introduced last year, are expected to improve these numbers.
VisitBritain is hoping it will help to attract 650,000 Chinese visitors by 2020, with spending power of almost £1.1bn (US$1.7bn).
London’s position as one of the largest city markets for international tourists, and the potential upswing in Chinese visitor numbers, has attracted increasing numbers of international brands.
Since 2012, 98 international brands have opened their first UK store in London with another 11 expected by the end of the year.
New entrants
The majority of these new entrants have come from Europe (64%), with another 25% originating from North America are now also, largely reflecting the existing international mix of retailers on London’s key shopping streets.
However, retailers from Asia Pacific and South America have established a presence in London, reflecting the increasing globalisation of London’s retail landscape and its visitor profile. This influx of new retailer entrants, combined with availability constraints on the traditional key pitches, have helped to open up new retail ‘destinations’ within London.
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Historically, any new retail brands to London would have tended to concentrate within a relatively narrow selection of pitches. The scale of new entrants and existing demand, combined with improvements and enhanced ‘curation’ by a number of existing and emerging landed Estates within Central London has widened the variety of retail ‘destinations’ available to both occupiers and shoppers.
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The top locations of choice for new overseas retailers to London since 2012 are Westfield (West London and Stratford), Covent Garden and Bond Street.
This influx of international spend has not been solely confined to consumers and occupiers. Investment by international investors into Central London retail property has also intensified.
Total acquisition activity by overseas investors totalled £1.5bn in 2014. This represented 59.2% of total activity levels. This investor behaviour is changing the ownership landscape of some of London’s key shopping streets. And it is not just international investors that have become increasingly acquisitive. International retail brands themselves have also been on their own shopping spree.
Overseas ownership
Close to half (45.2%) of all retail units on Bond Street are now owned by overseas entities, up by 10% in January 2013. But around a third of these international owners are in fact international retailers, not investors. While retailer owner-occupation is nothing new on Bond Street, the change has been the increase in acquisition by retailers irrespective of whether they are occupiers or not.
Retailer ownership has increased by 28% since early 2013, but, only half of these retailer owned units are owner-occupied.
Purchaser motivations seem to be in part competitive and in part a way to future proof themselves against further rental growth following the strong rental uplift seen over the last three years (prime Zone A rents on New Bond Street have increased by an average of 20.8% per annum). This trend appears relatively unique to London and is facilitated by the city’s transparent and open real estate market.
On the flip side, this investment appetite from brands has also contributed heavily to competitive tension in yields and retailers becoming landlords to their competitors. In the case of Oxford Street, where the need for protectionism is less acute, overseas retailer ownership is lower, accounting for 10.0% of all units on the street.
Meanwhile, investment activity by other international investors has picked up significantly. With availability on Bond Street some overseas investors have looked to other retails streets to satisfy demand. For example, overseas ownership on Oxford Street has increased by 24.4% since early 2013.
Going forward, activity from overseas investors is expected to continue but is likely to focus on those key retail destinations where current ownership profile offers opportunity.
<a href="/images/2015/07/17/Screen%20Shot%202015-07-17%20at%201.55.32%20PM.png" target="_blank">Click to enlarge</a>
 
<img src="/images/2015/07/17/Screen%20Shot%202015-07-17%20at%201.55.32%20PM.png" alt="">
 
The weight of money pressing on real estate in world cities is a widely reported phenomenon. London was the second most invested world city after New York by large-scale investors in the year to june 2015 according to Real Capital analytics.
But it is not just institutions and corporations who are focused on real estate as an investment class. The type and range of players in the market has increased substantially since 2008 with Sovereign Wealth and private individuals entering the fray to a much greater extent.
A recent survey of global wealth advisers by Savills/Wealth Briefing showed that private wealth is very active in real estate with 45% investing more than a fifth of wealth in direct property holdings and 37% investing an additional sum amounting to more than 10% of their wealth in indirect property holdings (property companies and REITs for example). Only 9% of these survey respondents said their clients were planning to decrease their exposure to direct property and 13% to decrease their indirect holdings.
Much of the recent buying activity in real estate has been directed at prime property in world cities, and buying behaviour has been focused on London and top US cities. Our survey of private wealth property holdings in 2014 shows few signs of activity abating. According to the Savills/Wealth Briefing survey, 67% of high net worth private clients want to buy more real estate in North America and 63% in the United Kingdom. This compares with only 37% who are looking to buy in China and Hong Kong, for example.
One characteristic of private wealth is that it is focused on different sectors of property to institutional money. Residential property, development land and agricultural land are the three top buys on private clients’ shopping lists (72% of all respondents say their clients are looking at this sector). But offices also feature prominently, with 50% looking to buy in this sector.
The implications of this for London are that money will likely continue to press on the city’s real estate markets. For those seeking the best income returns from day one, the extent to which this weight of money suppresses yields and increases prices means for them, too much money is pointing at the city.
Consequently, we anticipate that the smart, income-seeking money will increasingly move away from the prime centre to the higher-yielding periphery and even outside of London. Some of it already is, with high-quality city markets like Oxford, Cambridge and Edinburgh already seeing significant investment activity.
Those seeking capital growth will do well to look at the underlying fundamentals of rental growth and the prospects of its continuance, as there is very little scope for further investment yield reductions to boost prices.
Meanwhile, trophy properties, such as mansions, farms and sporting estates, are also beginning to see increased activity and we expect this to grow. Access to London, even from these more far flung retreats, will still be important, so the western corridor with access to Heathrow and the world beyond will likely continue to be a favoured location.
<a href="/images/2015/07/17/Screen%20Shot%202015-07-17%20at%201.55.41%20PM.png" target="_blank">Click to enlarge</a>
<img src="/images/2015/07/17/Screen%20Shot%202015-07-17%20at%201.55.41%20PM.png" alt="">
Yolande Barnes is director, world research with Savills. You can follow Yolande on Twitter <a href="https://twitter.com/yolande_barnes" target="_blank">here.</a>
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jchancellor-FAypfDUnLy

Occupier and investor demand in London: Savills

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You know it wasn't that long ago that we lived in a totally different world. We had jobs for life. If you started work after leaving school in a bank, then you worked for a bank for the next thirty years or so. It was the same as buying a house and living in it for the same thirty years or so. That one house was deemed your 'investment for life' as superannuation was not yet invented.  
Also about 30 years ago, a little thing called the internet was introduced to us, we were told we could 'surf' the World Wide Web, little did we understand at the time the absolute massive impact this would have on the way we'd  live in the future.  
 I have trouble explaining to my kids that there was no internet when we were kids! The internet has now become an historical era; we talk pre and post internet. The internet opened up everything and now anyone, no matter what age can start a new business or become an 'entrepreneur'. So the 30 year careers in one industry have become extinct. 
A survey I read recently reported that 41% of all new business start ups in Australia are launched by people aged between 30 and 39, 21% aged 25 to 29 BUT 16% are aged between 40 and 44. I have a client starting her new business at the age of 58. Anything is possible. 
Today I received a call from a fifty something man who had made his fortune in buying, building up and selling businesses and now he was ready to park his money in property using a Self Managed Super Fund. He said "Jo, I'm ready now to kick back a bit and let my investments do the work for me." He is looking at a Property Bloom development that he'll fund from his SMSF that will create a nice chunk of equity during the development process and then result in a strong  yielding investment for him. 
The age for first time property investors is reducing. Whilst one in five Australians own an investment property, the number of Generation Y’s, individuals born roughly between 1982 and 1994, who own multiple properties is now on par with the Baby Boomers (17% own 2 or more). My step daughter fits this description with three properties under her belt.  Our youngest client will have six investment properties once we complete the two developments we have underway for him. His strategy is to build his portfolio as quickly as possible then as he starts a family, pull back and let time and capital growth work for him. The Gen Ys I know are clever. They embraces the internet early and used it as a tool to research and educate themselves on property investing. 
We live in a world overflowing with information and as older people realise that perhaps their 30 year career and original home is not going to deliver the retirement income they'll need over the next 30 years - because yes we are also living longer - then it's never too late to start investing and looking at entrepreneurial opportunities. Don't let physiological hang ups about 'comfort zones' set years ago hold you back. 
It's exciting times and why not build your own dream now? 
Jo Chivers is Chief Executive Officer of property development project managers <a href="https://www.propertybloom.com.au/about" target="_blank">Property Bloom</a>.
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jochivers-wq5Bp59R5a

Never too old to own your future: Jo Chivers

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Mortgage Choice chief executive John Flavell warns getting rid of negative gearing would make housing less affordable.
This was because there would be less investment in new housing stock and investors faced with a winding back of tax concessions would put rents up to cover their losses.  
"I'm with the government in terms of ruling it out," he said.
"I'm looking at affordability of housing across the board, for renters as well as owner-occupiers." 
John Flavell says negative gearing played an important role in the property market.
"The tax benefits associated with negative gearing helps to make property investment more attractive to some Australians, and given that the success and strength of the housing market is critical to the ongoing health of the Australian economy, it doesn’t make sense to consider removing any initiatives that help this market."
"Instead of placing the emphasis on negative gearing and the impact it has on the property market, we should be placing the emphasis on first home buyers and what initiatives/incentives we can introduce to help them.  
"It would be great to see first home owners receiving similar tax concessions as investors - as we believe this would encourage a lot more first buyers into the market. 
"If we want to improve housing affordability and help more first home buyers into the market, we have to pull on the right levers.
"Housing affordability is a function of property prices, income levels, the cost of and access to credit as well as supply of rental accommodation.
"To have a positive impact on affordability, drive up the instances of home ownership and reduce rental burden, all of these levers need to be considered and used.”
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Mortgage Choice says retaining negative gearing makes sense 

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Chesterton International (NSW) Pty Limited has evolved into CI Australia Pty Limited.
Chesterton has been a fixture in the Sydney commercial property sector for decades, servicing the commercial, retail and industrial markets in the areas of investment sales, asset management, facilities management and leasing.
In 2012 the company was purchased by APP Corporation, a national professional services consultancy to the property and infrastructure industries.
CI Australia chief executive officer, Andrew Hunter said the rebranding to CI Australia strategically positioned it for the future expanding from Sydney into other key markets including Melbourne and Brisbane.
In Sydney, CI Australia works closely with all major property companies and trusts as well as State Government clients including Railcorp and Roads and Maritime Services (RMS) to provide property management and other related real estate services on their extensive property portfolios.
Wih same corporate blue, its new logo reflects the growing relationship with its parent company APP.
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Chesterton International evolves into CI Australia

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SPONSORED POST
You put funds aside during your working years to support your retirement income needs. In Australia this is partly managed by the mandatory employer contribution to superannuation. 
Some think this will be sufficient to meet their needs. However, if you wish to live the life portrayed in your imagination and the advertising you also need to contribute. Jeremy Cooper, the Chair of the Federal Government’s Super System Review and Chairman, Retirement Income at Challenger, said it would cost about $1M today to buy a Government Pension for retirement. This $1M would buy an annual income of about $33,717 for a couple with no additional Government benefits.
You need your superannuation funds to grow for two reasons: firstly, because inflation is constantly eroding the spending power of these savings, and secondly to provide more choices in your retirement years. To support your choices you need to appreciate capital growth, inflation, and the role of leveraging through borrowed funds. 
Inflation
Superannuation saving begins in your teens or twenties and you want your money to have the same spending power in your sixties, seventies and eighties. However inflation is constantly reducing the value of money as goods rise in price over time. 
Inflation, which we measure as CPI, at 2% per annum means an income of $100,000 in year one buys only half the same goods in year 37. Many now expect to live beyond 80 or even 90 years, and the impact of inflation in retirement is a key concept to appreciate. It is in these latter years of your retirement that your health care costs can really escalate. If your spending power has reduced over time you may not be able to afford the care you need. 
If you invest your superannuation via a bank account it is unlikely your money would maintain its spending power over time, as the returns from interest after tax are not high enough. If you had invested in property it has maintained the value of your money and maintained your spending power over the last 30 years and more. 
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Capital Growth
Most are keen for their superannuation savings to perform, to grow at a rate greater than inflation. This performance increases the risks to the funds, however you need to invest in assets that grow. 
Because of the past performance of property many of you are confident to invest. Most of you have own your own homes, have seen them rise in value over the years and have successfully managed your debt. 
Leverage
Most of you intend to borrow money to invest in property, and in an SMSF lenders typically will lend up to 70% of the value of the property and sometimes up to an 80% LVR. 
This leveraging increases the returns on your investment. If you have $100,000 invested in a $300,000 property and it grows by 7% per annum then you have made three times that amount on your money and have a 21% return. It is this multiplying effect as you leverage your money with borrowed funds that creates much of the wealth from property. 
Many property investors buying property outside of super, leverage their properties hard to create strong returns on investment. Many plan to release equity to boost their capital to re invest. Inside of super the rules are quite different. You can’t release equity from a property as it grows in value. Rather the decision is to hold or to sell. 
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Why property investment through an SMSF? Forrester Cohen

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People who buy property through a self-managed superannuation fund need to consider what to do with the asset after they have retired and how to pass it on after they have passed away. 
SMSFs allow for assets to be handed from one generation to another as an inheritance, but there are regulatory constraints and taxes to take into account. 
Reserves after retirement
At retirement, an SMSF member may start a pension from their fund, in which case the balance will reduce over time. The fund may have sufficient cash flow to support pension payments but as the person ages the proportion of the fund’s balance that must be paid out as a pension increases so it becomes more likely that the property will have to be sold to support the pension. 
If the family has other sources of income, and doesn’t need to draw a pension from the SMSF, it is possible to leave the assets untouched by keeping the fund indefinitely in what’s known as the accumulation phase. 
SMSFs in accumulation phase do not issue a pension but the income and capital gains made within the fund are taxed at 15%, while they would be tax free if the SMSF was paying a pension. For some retirees, the 15% tax is still less than they would pay if they held the property in their own name so there can be advantages to holding it in the SMSF to pass on as an inheritance.
Inheritance
When an SMSF member dies, the assets held in their fund do not automatically form part of their estate. The estate can access the assets and distribute them according to the person’s will but conditions in the SMSF’s trust deed and superannuation laws must also be satisfied.
There have been cases in which surviving SMSF trustees have been able to go against the wishes of the deceased fund member. SMSF members should seek legal advice on how to avoid that risk.
SMSF members may provide their fund with a binding death benefit nomination, which gives direct instructions on who should receive the deceased member’s share of the fund’s assets but there are restrictions on who can be named as the recipient. Whether such a nomination is appropriate will depend on the fund member’s personal circumstances. 
Relationships matter
The way in which beneficiaries receive their inheritance depends on their relationship with the deceased SMSF member.
People who are in what’s classified under superannuation law as a dependent relationship with the fund member can receive their inheritance payment as a lump sum or a pension from the fund. People who are not in a dependent relationship must be paid a lump sum. 
Dependants can include a spouse, de facto or ex-spouse, as well as children who rely on the person for necessary financial support or are aged under 18 years. Other people may qualify as being dependants of the deceased but adult children typically do not.
The amount of tax each beneficiary pays on the inheritance also depends, in part, on whether or not they are a dependant of the deceased. Other factors also influence the amount of tax due, including the tax structure of the fund itself.  
In some cases, a property held through an SMSF can be passed from a deceased fund member to their beneficiaries without leaving the fund. The way the SMSF is structured affects how easy and how costly it is to do this. 
SMSFs can have up to four members. They can be established with individual trustees, where each member is also a trustee, or with a corporate trustee where each member is also a director of the trustee company. 
If the fund was established with individual trustees, the titles on the SMSF’s assets and the individual trustees must be updated when a fund member dies. State governments and any administration systems the SMSF uses may charge fees for these changes.
Funds with a corporate trustee can change their members by updating the corporate trustee’s directors. The fund must notify the Australian Securities and Investments Commission and the Australian Taxation Office of these changes but there is no change to the title of the SMSF’s assets.
Are other vehicles better?
Holding property through an SMSF is just one way to pass the asset on through the generations. Other options include owning the property directly, or through another tax structure such as a company or family trust. Each has its advantages and drawbacks. 
SMSFs can be tax effective in some situations but there may be simpler and less costly alternatives. Each family is different and what’s best will vary depending on individual circumstances. Seek professional advice. 
 
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Set up future generations through estate planning: Forrester Cohen

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A two level Victorian property with ground floor retail access and a self-contained upstairs living space has been sold to a private investor for $1.55 million.
The property, on 468 Bridge Road Richmond was sold subject to a five year lease with a five year option, returning $5,000 per annum net.
The sale at the Burnley Street end was brokered by Teska Carson agents Matthew Field and Larry Takis.
It sold at $835,000 in 2008.
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