<p>Local developer Harridan is seeking to turn its Woolloongabba apartment project into the first stage of a broader transformation of Burke Street, using a new 16-storey mixed-use building to establish a greener pedestrian connection toward the rapidly evolving Boggo Road transport and knowledge precinct.</p>

<p>The South East Queensland developer has filed plans for 154 apartments on the <a href="https://www.apartments.com.au/new-apartments/4-burke-street-woolloongabba-qld-4102">southern side of Burke Street</a>, where its proposal has been designed alongside a wider vision by LatStudios for the street.</p>

<p>That vision positions the southern side of Burke Street for buildings of 15 storeys and above, while envisaging lower-rise development of up to five storeys on the northern side to transition into Woolloongabba's existing character housing. It also proposes wider pedestrian verges, deep planting, new street trees and upgrades to the pedestrian approach to Boggo Road Station.</p>

<p>The Harridan development itself has been designed by Brisbane-based Arqus Design and will comprise 154 apartments across 16 storeys. The mix is weighted heavily toward two-bedroom apartments, with 121 proposed alongside 10 one-bedroom and 23 three-bedroom residences. There will typically be around 14 units per floor.</p>

<p>A lower-ground car park and three podium levels will accommodate 156 resident parking spaces, along with visitor and commercial parking. There will also be 154 resident bicycle spaces and 40 visitor bicycle parks.</p>

<p>&nbsp;</p>

<p>Harridan is a family-owned developer and part of the Holmwood Highgate Group, with more than three decades of development activity across South East Queensland. Its portfolio spans residential, commercial and industrial property, with current residential projects including Riverbank on Byron in Bulimba, Esperance Residences in Carina and The Precinct at Kinross Road in Thornlands.</p>

<p>Wooloongabba has been popular for apartment developers, particularly since the announcement of the 2032 Summer Olympics games in Brisbane.</p>

<p>While there have been a lot of development applications, it has failed to materialize into real supply.&nbsp;</p>

<p>Sarazin has been the major player in the area. They are under construction at Murcia Residences, on the fringe of East Brisbane and Woolloongabba. They have just launched <a href="https://www.apartments.com.au/new-apartments/the-stanley-residences-woolloongabba-8-trafalgar-street-woolloongabba-qld-4102">The Stanley Residences</a>, in Woolloongabba on Trafalagar Street. They also have Nuage coming soon on the nearby <a href="https://www.apartments.com.au/new-apartments/nuage-woolloongabba-14-wellington-road-woolloongabba-qld-4102">Wellington Road</a>.</p>


Joel Robinson

First look: Harridan plans Burke Street transformation beside Boggo Road transport hub

<p><strong>IN BRIEF</strong></p>

<ul>
	<li>
	<p>Just three double-storey Sky Homes sit at the top of The Waterline, each with its own private marina berth and rooftop terrace.</p>
	</li>
	<li>
	<p>Construction on The Waterline is complete, with the first residents expected to move in from mid-October.</p>
	</li>
	<li>
	<p>Sky Homes range from 282 sqm to 367 sqm and are priced from $3.65 million.</p>
	</li>
</ul>

<hr />
<p>Lewis Land has opened the first completed sky home for inspection at Harbour Shores, giving buyers their first opportunity to step inside one of just three double-storey residences crowning The Waterline.</p>

<p>Each sky home comes with its own private marina berth, rooftop terrace and Broadwater views, combining the scale of a larger home with direct access to the boating lifestyle that underpins the wider <a href="https://www.apartments.com.au/new-apartments/harbour-shores-biggera-waters-564-oxley-drive-biggera-waters-qld-4216">Harbour Shores</a> masterplan.</p>

<p>[smartcode_project:default project_id=113271 project_image_fid=366708]</p>

<p>Lewis Land Head of Development Michael Long said the inclusion of a berth with every Sky Home had become increasingly valuable as marina access across the Gold Coast tightened.</p>

<p>“Marina berths are becoming increasingly difficult to secure across the Gold Coast, so including one with every Sky Home makes this a genuinely rare offering,” Long said.</p>

<p>“The private 70-berth marina will accommodate boats up to 12 metres in length and is positioned just 2.5 kilometres from the Broadwater, placing the open ocean only 15 minutes away.</p>

<p>“Being able to step out of your home onto your boat is a rare luxury, and it’s something residents here can look forward to when it opens later this year.”</p>

<p>[smartcode_project:default project_id=113271 project_image_fid=366709]</p>

<p>The display opening comes as construction completes on The Waterline, with the first residents expected to move in from mid-October.</p>

<p>The three Sky Homes range from 282 sqm to 367 sqm and each feature three bedrooms, three bathrooms, multiple living zones, expansive kitchens with butler's pantries and large balconies taking in the Broadwater outlook.</p>

<p>Each residence also has three secure basement car spaces and additional storage.</p>

<p>“This is the first opportunity the Gold Coast has had to step into Harbour Shores and see, touch and feel what we’re bringing to life here,” Long said.</p>

<p>“There are only three Sky Homes within The Waterline, ranging in size from 282sqm to 367sqm, with each residence featuring three large bedrooms, three bathrooms, multiple living zones, expansive custom-built kitchens with butler’s pantry, and large balconies capturing Broadwater views.”</p>

<p><img alt="Harbour Shores" data-entity-type="file" data-entity-uuid="bab65e10-4fab-45e1-92d8-fc56e2ab98ff" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-25%20at%202.00.16%E2%80%AFPM.png?VersionId=XT8q76LsPkw3cYTsvN3JfFDaPLud90PN" /></p>

<p>Residents of The Waterline will have access to a private pool, along with Harbour Shores' wider collection of amenity including a lagoon pool, social clubhouse, tennis court, gym, yoga facilities and sauna.</p>

<p>Lewis Land partnered with Studio Collective to furnish the completed display, with the interiors designed to demonstrate how the residences could function as permanent homes rather than simply as show apartments.</p>

<p>Studio Collective Director Melissa Park said the surrounding waterways informed the interiors, but in a more restrained way than a traditional coastal scheme.</p>

<p>“We drew inspiration from the canals and coastal surrounds, but our approach was to interpret that subtly through layered materials and a grounded palette of earthy tones, rather than literal coastal references,” Park said.</p>

<p>“We introduced hero moments of green and teal to reference the surrounding waterways, while mirrored elements help reflect natural light.</p>

<p>“The result is a residence that feels elevated yet comfortable, somewhere buyers can genuinely imagine themselves living, entertaining and unwinding.”</p>

<p>Sky Homes are priced from $3.65 million.</p>

<p>Lewis Land is also offering private marina berths with The Residences, its limited collection of three and four-bedroom villas positioned directly along the Harbour Shores waterfront boardwalk.</p>

<p>Three-bedroom villas are priced from $2.99 million, while four-bedroom residences start from $3.19 million.</p>

<p>Harbour Shores is being marketed by Colliers International.</p>

<p data-end="555" data-start="341">[smartcode_project_cta:default project_id=113271]</p>


Lewis Land opens sky home display as The Waterline completes at Harbour Shores

<p data-end="387" data-start="97">St Vincent de Paul Society Housing Australia has filed plans for a major mixed-use housing precinct on the southern edge of the North Sydney CBD, adding another significant proposal to a pocket around North Sydn​ey Station that is quickly becoming one of the LGA's busiest development zones.</p>

<p data-end="697" data-start="389">The State Significant Development Application covers a 5,990 sqm site at <a href="https://www.apartments.com.au/new-apartments/1-19-mackenzie-street-lavender-bay-nsw-2060">1-19 MacKenzie Street and 211 Blues Point Road in Lavender Bay</a>, immediately south of Nor​th Sydney Station and between the commercial core and the lower-rise Lavender Bay Heritage Conservation Area.</p>

<p data-end="925" data-start="699">Designed by Wardle, the proposal would deliver a new residential tower comprising 88 build-to-sell apartments and 19 affordable apartments, alongside a separate co-living building with 57 rooms and a building manager's studio.</p>

<p data-end="1217" data-start="927">It would also see the significant restoration and upgrade of St Francis Xavier Catholic Church, the adaptive reuse of the former school building, new parish facilities, retail, a new public square and around 1,000 sqm of publicly accessible open space.</p>

<p data-end="1217" data-start="927"><img alt="Vinnies North Sydney" data-entity-type="file" data-entity-uuid="d5dd7f87-a617-463e-b577-17541e01f0e9" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-26%20at%209.10.13%E2%80%AFAM.png?VersionId=4R8TsFN3P_LrrXO2HswTOIrx2blil8lh" /></p>

<p data-end="1538" data-start="1219">The project is seeking a concurrent rezoning of the site to R4 High Density Residential and an increase in the maximum building height to allow a tower reaching RL120, or up to 20 storeys. The proposal was progressed through the NSW Government's Housing Delivery Authority pathway.</p>

<p data-end="1723" data-start="1540">The build-to-sell component will be weighted toward larger apartments, with just six one-bedroom apartments compared with 31 two-beds, 43 three-beds and eight four-bedroom residences.</p>

<p data-end="2063" data-start="1725">The 19 affordable apartments will comprise two studios, 15 one-bedroom apartments and two two-bedroom apartments, taking the total apartment component to 107 residences before the 58 co-living rooms are included.</p>

<p data-end="2063" data-start="1725"><img alt="Vnnies" data-entity-type="file" data-entity-uuid="7d568ca5-cb90-4e18-96c6-d9795dba0c56" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-26%20at%209.10.05%E2%80%AFAM.png?VersionId=GY2R5M9VtQh0EKy1vajaea19PSLOPuRD" /></p>

<p data-end="2205" data-start="2065">Wardle's design for the Vinnies site has sought to negotiate that emerging high-rise context while retaining the lower-scale character of MacKenzie Street and the adjoining heritage conservation area.</p>

<p data-end="4244" data-start="4087">The main building adopts a three-storey podium and tower arrangement, with the podium aligned to the ridgeline and front setback of St Francis Xavier Church.&nbsp;Wardle has designed the podium with colonnades, seating, recessed entries and active ground-floor frontages, with sandstone-toned precast concrete and face brick referencing the materiality of the existing church.</p>

<p data-end="4598" data-start="4246">The tower then steps back eight metres to the south and six metres to the north before rising in a sculpted form comprising four interlocking quadrants. Wardle has also introduced rounded forms and chamfered corners to reduce the tower's perceived bulk and improve view sharing with neighbouring development sites.</p>

<p data-end="4798" data-start="4600">Resident facilities and outdoor areas are planned at the separation between the podium and tower at Level 3, oriented toward Sydney Harbour and the CBD skyline.</p>

<p data-end="4798" data-start="4600">The tower itself will feature a glass reinforced concrete facade, with recessed balconies and deep reveals used both to provide shading and privacy and frame views toward the harbour and city. The lower levels take a different architectural approach, using brick and sandstone-toned finishes intended to establish a stronger relationship with St Francis Xavier Church. The Church itself will be conserved and upgraded for its continued use, while the former school building will be adaptively reused as part of the co-living component.</p>

<p data-end="5032" data-start="4800"><img alt="Lavendar Bay" data-entity-type="file" data-entity-uuid="2d4418ad-90aa-4d49-af93-c80b140aea80" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-26%20at%209.09.47%E2%80%AFAM.png?VersionId=Kv4gzbsACaGvZSRuaqcfGC54jEJRXIDJ" /></p>

<p data-end="5486" data-start="5211">&nbsp;</p>

<p data-end="2205" data-start="2065">The proposal adds to an increasingly concentrated pipeline of residential development around Blue Street, MacKenzie Street and Lavender Bay.</p>

<p data-end="2375" data-start="2207">Just west of the site, Central Element lodged plans earlier this year for one of the most significant residential developments proposed in Lavender Bay in recent years.</p>

<p data-end="2712" data-start="2377">Central Element's SJB-designed scheme at 64-66 Lavender Street and 3-7 Middlemiss Street would deliver 163 apartments across two towers rising 23 and 32 storeys, replacing five existing apartment buildings containing 32 homes. The project also forms part of the Housing Delivery Authority pathway.</p>

<p data-end="2751" data-start="2714"><em><a href="https://www.apartments.com.au/news/nsw/first-look-central-element-reveals-lavender-bay-apartment-plans?utm_source=chatgpt.com" rel="noopener" target="_blank">First look: Central Element reveals Lavender Bay apartment plans</a></em></p>

<p data-end="2865" data-start="2753">Immediately around North Sy​dney Station, another two significant proposals have emerged at 5 and 15 Blue Street.</p>

<p data-end="3067" data-start="2867">Zurich Australian Insurance Properties is seeking to adaptively reuse its longstanding commercial building at 5 Blue Street, directly above North Sydney Station, rather than demolishing the structure.</p>

<p data-end="3379" data-start="3069">Its SSDA proposes converting the building into a 14-storey mixed-use development with 62 apartments and 86 co-living rooms, together with ground-floor retail and a major refurbishment of Blue Street Plaza. The application is currently at the Response to Submissions stage.</p>

<p data-end="3379" data-start="3069"><a href="https://www.apartments.com.au/news/nsw/first-look-zurich-targets-north-sydney-office-conversion-with-148-unit-proposal-above-metro-station"><em>First look: Zurich targets North Sydney office conversion with 148-unit proposal above Metro station</em></a></p>

<p data-end="3883" data-start="3659">&nbsp;</p>


First look: Vinnies files for 20-storey Lavender Bay apartment tower as North Sydney housing pocket heats up

<p data-end="540" data-start="324">When the opportunity arose for South Australian developer Palumbo to return to Kent Town, where it had previously delivered East Park Apartments and the East<br />
Rundle Apartments, it wasn't one the longstanding developer-builder was going to pass up.</p>

<p data-end="680" data-start="542">The decision was quickly vindicated, with more than 30 apartments sold within the first month of launching <a href="https://www.apartments.com.au/new-apartments/royal-apartments-kent-town-2-8-north-terrace-kent-town-sa-5067">Royal Apartments</a> to the market.</p>

<p data-end="909" data-start="682">The 206-apartment development, which will bring significant new supply to Adelaide's tightly held eastern city fringe, also gives <a href="https://www.apartments.com.au/developers/palumbo">Palumbo</a> the opportunity to bring new life to one of Kent Town's most recognisable watering holes.</p>

<p data-end="909" data-start="682">[smartcode_project:default project_id=6109 project_image_fid=376073]</p>

<p data-end="1076" data-start="911">Royal Apartments incorporates the historic Royal Hotel, a venue Palumbo Managing Director Daniel Palumbo said has a longstanding connection with the local community.</p>

<p data-end="1166" data-start="1078">"Everyone in the area has history with the Royal Hotel," Palumbo told Apartments.com.au.</p>

<p data-end="1257" data-start="1168">"It was quite an active pub and social gathering place for locals. We want to bring it back to its former glory."</p>

<p data-end="1257" data-start="1168">[smartcode_project:default project_id=6109 project_image_fid=376072]</p>

<p data-end="1406" data-start="1259">The wider development will comprise two residential towers alongside the restored hotel, sitting on North Terrace opposite the Adelaide Park Lands.</p>

<p data-end="1475" data-start="1408">For Palumbo, the project also marks a return to familiar territory.</p>

<p data-end="1671" data-start="1477">The developer completed East Park Apartments next door more than a decade ago and jumped at the opportunity to develop in Kent Town again when the Royal Hotel site became available.</p>

<p data-end="1726" data-start="1673">"The opportunity emerged, and we moved to secure the site," Palumbo said.</p>

<p data-end="1874" data-start="1728">"We were approached by the previous landowner, who said they had extensive commitments in Sydney and weren't in a position to deliver the project.</p>

<p data-end="2025" data-start="1876">"We took over the site and within six months recut the design scheme to be more in keeping with the type of development we want to bring to Adelaide.</p>

<p data-end="2111" data-start="2027">"Now we're on the market and those changes have really resonated with local buyers."</p>

<p data-end="2225" data-start="2113">That has translated into a strong start to sales, with 33 apartments transacting in the project's first 35 days.</p>

<p data-end="2383" data-start="2227">Palumbo said the early purchaser profile had been consistent with the group's traditional focus on owner-occupiers rather than investor-led apartment stock.</p>

<p data-end="2446" data-start="2385">"Local owner-occupiers have always been our market," he said.</p>

<p data-end="2602" data-start="2448">"There are always some investors, but we've never developed what would be called traditional development stock. Owner-occupiers are very much our market."</p>

<p data-end="2602" data-start="2448">[smartcode_project:default project_id=6109 project_image_fid=376068]</p>

<p data-end="2742" data-start="2604">The buyer mix has been diverse so far, with downsizers and younger professionals both accounting for a significant portion of early sales.</p>

<p data-end="3013" data-start="2744">South Australia's current stamp duty settings, which allow&nbsp;eligible homeowners in South Australia aged 60 savings of up to $103,830 on stamp duty when they downsize to a new property valued at up to $2 million,&nbsp;have helped encourage downsizer activity, while younger buyers in their late 20s and early 30s have been attracted to the opportunity to live immediately outside the CBD while still being able to walk into the city.</p>

<p data-end="3013" data-start="2744"></p>

<p data-end="3065" data-start="3015">Location has been a major part of the proposition for both buyer cohorts.</p>

<p data-end="3065" data-start="3015">[smartcode_project:default project_id=6109 project_image_fid=376075]</p>

<p data-end="3250" data-start="3067">Royal Apartments sits on North Terrace directly opposite the Adelaide Park Lands, with residents able to walk through the parklands toward the East End, Rundle Street and Rundle Mall.</p>

<p data-end="3376" data-start="3252">Apartments have been positioned to capture views across the parklands, Adelaide skyline, Botanic Gardens and Adelaide Hills.</p>

<p data-end="3516" data-start="3378">Palumbo believes the scarcity of developable land along this section of the Park Lands makes the site particularly difficult to replicate.</p>

<p data-end="3592" data-start="3518">"There's very few allotments on that side that can be developed," he said.</p>

<p data-end="3714" data-start="3594">"If this location was in New York and you were sitting on Central Park, you'd be talking about a $60 million apartments."</p>

<p data-end="3861" data-start="3716">Royal Apartments will offer a broad mix of residences, ranging from one-bedroom apartments through to four-bedroom sub-penthouses and penthouses.</p>

<p data-end="4004" data-start="3863">Current listings include one-bedroom apartments from $680,000, while larger three and four-bedroom residences are priced around $2.5 million.</p>

<p data-end="4145" data-start="4006">Residents will have access to a swimming pool, gym, barbecue and recreation areas, residents' lounge and dining space, and a communal deck.</p>

<p data-end="4145" data-start="4006">[smartcode_project:default project_id=6109 project_image_fid=376067]</p>

<p data-end="4273" data-start="4147">The apartments will feature generous balconies, while secure parking, bicycle storage and storage cages will also be provided.</p>

<p data-end="4480" data-start="4275">A porte-cochère-style arrival and drop-off area has also resonated with buyers, particularly those attracted to being able to walk into the CBD during the day while retaining secure vehicle access at home.</p>

<p data-end="4650" data-start="4482">Palumbo is acting as developer, architect and builder on Royal Apartments, continuing the vertically integrated model it has used across its South Australian portfolio.</p>

<p data-end="4785" data-start="4652">The group was also behind the $150 million Sofitel Adelaide, the 251-room five-star hotel and residential tower which opened in 2021.</p>

<p data-end="4889" data-start="4787">Palumbo said Royal's launch had come at an interesting time for the broader Adelaide apartment market.</p>

<p data-end="5144" data-start="4891">Buyer confidence had initially been impacted by uncertainty surrounding the Federal Budget and broader economic conditions, but Palumbo believes sentiment is beginning to improve against a backdrop of significant investment flowing into South Australia.</p>

<p data-end="5305" data-start="5146">He pointed to increased activity across defence and resources, including Olympic Dam, as potential long-term drivers of the state's economy and housing market.</p>

<p data-end="5378" data-start="5307">"Money is starting to flow into Adeliade, significant amounts as Adelaide bucks the trend of the rest of the country.," Palumbo said.</p>

<p data-end="5495" data-start="5380">"There's a lot of activity in the economy over the next decade. I think more investment will come into this market."</p>

<p data-end="5650" data-start="5497">Early works on Royal Apartments are expected to commence this year, with major construction activity and cranes anticipated on site from early next year.</p>

<p>[smartcode_project_cta:default project_id=6109]</p>

Palumbo's return to Kent Town strikes early chord with buyers

<p>Go-to builder-developer <a href="https://www.apartments.com.au/developers/graya">GRAYA</a> is continuing to bulk out its already impressive and diverse apartment portfolio across South East Queensland. Their latest milestone is securing development approval for Silk, its boutique riverfront apartment development in St Lucia.</p>

<p>The approval clears&nbsp;the way for the team to begin construction planning for the 22-residence project.</p>

<p><a href="https://www.apartments.com.au/new-apartments/silk-st-lucia-16-18-sandford-street-st-lucia-qld-4067">Silk</a> will rise 15 levels from an 810 sqm site at 16-18 Sandford Street, occupying a prominent bend of the Brisbane River with a prized northern aspect across Orleigh Park toward the Brisbane CBD.</p>

<p>The approved scheme will comprise 16 split-floor and six full-floor residences, continuing GRAYA's move into larger-format apartment developments targeting Brisbane's prestige owner-occupier market.</p>

<p>The project has been designed around the site's broad river frontage and dual-direction views, with GRAYA prioritising larger residences, privacy and outlook over apartment yield.</p>

<p><img alt="Silk St Lucia" data-entity-type="file" data-entity-uuid="aa5c2349-f96c-4914-a812-1f2cd6827af8" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-26%20at%208.25.44%E2%80%AFAM.png?VersionId=WY0vEU_7vYjeRJKQHiCwFdMxu8PvFh52" /></p>

<p>GRAYA Co-founder and Chief Executive Officer Rob Gray said the project had been shaped around local homeowners wanting to remain in St Lucia without maintaining a traditional family home.</p>

<p>"St Lucia is one of those suburbs people do not want to leave," Gray said.</p>

<p>"They know the river, the trees, UQ, the golf course, Toowong and Indooroopilly, and that familiarity is hard to replace.</p>

<p>"True riverfront opportunities here are exceptionally scarce. What we have designed at Silk is a way to stay in the suburb people love, with the scale and privacy of a private home and far less to maintain.</p>

<p>"This is not typical apartment product. It is a proper home on the river, and that is exactly what this market has been missing."</p>

<p>The approval comes as new apartment development continues to increase across the St Lucia and neighbouring Toowong corridor, although direct riverfront sites remain considerably more tightly held.</p>

<p>GRAYA Co-founder and Managing Director Andrew Gray said securing the approval had removed a significant element of development risk from Silk.</p>

<p>"Genuine riverfront sites of this quality in St Lucia are not something that comes up regularly," Gray said.</p>

<p>"The approval removes a substantial layer of execution risk, and the location underwrites demand in a way very few inner-city sites can.</p>

<p>"The fundamentals here are as strong as anything we have assessed in Brisbane."</p>

<p><img alt="Silk St Lucia" data-entity-type="file" data-entity-uuid="d0f3d734-65e1-48e8-8ed3-2e0715ffcdd9" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-26%20at%208.25.56%E2%80%AFAM.png?VersionId=sOLSs_jdHkXLWbBKzRyayf5BfTb2vPsD" /></p>

<p>Silk will see GRAYA return to a stretch of the Brisbane River where it already has recent construction experience. The vertically integrated group recently completed ARC in neighbouring Toowong as builder for developer Spyre, delivering the riverfront project on a constrained site.</p>

<p>GRAYA will take a different role at Silk, controlling the project from design and development through construction and aftercare under its vertically integrated model.</p>

<p>The development will include a gym and resident leisure areas at ground level, integrated with the river's edge.</p>

<p>Silk joins a growing pipeline for GRAYA across Brisbane and the Gold Coast, which includes Enclave, The Gallery, Coral and Ripple.</p>

<p>The developer-builder has also recently lodged plans for its largest project to date, <a href="https://www.apartments.com.au/new-apartments/the-silo-19-chester-street-newstead-qld-4006">The Silo</a>, a proposed <a href="https://www.apartments.com.au/news/qld/graya-buys-frasers-newstead-site-plans-the-silo-between-james-street-and-gasworks-precincts">$700 million mixed-use development</a> in Brisbane's James Street precinct.</p>

<p>Silk is expected to predominantly target local owner-occupiers and prestige buyers seeking a permanent riverfront home in Brisbane's inner west.</p>

<p>Registrations of interest are now open, with further details on the project and construction program to be released as it progresses.</p>

<hr />
<h2>SILK PROJECT FACTS</h2>

<p>Developer-builder: GRAYA</p>

<p>Project: Silk</p>

<p>Location: 16-18 Sandford Street, St Lucia</p>

<p>Apartments: 22</p>

<p>Built form: 15 levels</p>

<p>Site: 810 sqm riverfront holding</p>

<p>Mix: 16 split-floor and six full-floor residences</p>

<p>Status: Development approved</p>

<p>Next step: Construction planning underway</p>

<p>[smartcode_project_cta:default project_id=152168]</p>


GRAYA greenlit for riverfront St Lucia apartment development, Silk

Investment

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<p><span>SPONSORED POST</span></p>
<p><span>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. </span></p>
<p><span>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 </span><span style="line-height: 1.3em;">an annual income of about $33,717 for a couple with no additional Government benefits</span><span style="line-height: 1.3em;">.</span></p>
<p><span>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. </span></p>
<p><strong>Inflation</strong></p>
<p><span>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. </span></p>
<p><span>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. </span></p>
<p><span>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. </span></p>
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<p><strong>Capital Growth</strong></p>
<p><span>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. </span></p>
<p><span>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. </span></p>
<p><strong>Leverage</strong></p>
<p><span>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. </span></p>
<p><span>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. </span></p>
<p><span>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. </span></p>
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admin-TPy8csjoDs

Why property investment through an SMSF? Forrester Cohen

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<p>For what seams a long time we have been in the midst of a debate about the impact of offshore investment into our domestic residential property market, both private buyers and now increasingly developers. Revelations that FIRB regulations appear not to have been enforced for some years has as fuelled the idea that offshore buyers are driving up local prices and as a result locking some buyers, in particular first time buyers, out of the market.</p>
<p>However I think it’s important to acknowledge that this is not a new trend, offshore investment into Australia has been going on now for a very long time. Currently there appears to be a particular focus on Asian buyers, and this was a topic of a recent breakfast presentation I was involved in.</p>
<p>The breakfast presentation was hosted for a very interested audience by Coco Republic at their Sydney flagship store. The event has helped focus my views about this important debate, and so I am recounting some of the key points from that presentation.</p>
<p><strong>There’s a Lot of Wealth in Asia</strong></p>
<p>We need to remember that these buyers have very deep pockets, in some cases very deep and this extends to high net worth individuals (HNWI). While Asia is generally considered to rank third in number of HNWI after Europe and the USA, Asian numbers are growing rapidly, and will soon overtake the USA. Wealth also creates mobility and Asian buyers have always been happy to travel and invest in other countries, this mobility is often overlooked.</p>
<p>For these wealthy buyers as well as for a rapidly growing middle-class across the region, Australia is seen as a safe investment destination that also comes with a great lifestyle. Political stability and our property laws are also positives. Because of the current restrictions most offshore investment is naturally focused on new apartments, but within that market activity is generally spread across diverse areas, it’s not only CBD centric and I think that investment growth should be welcomed.</p>
<p>To say this is pushing up prices is too simplistic, prices are increasing, but it’s because of a combination of factors. Above all it’s tied to supply problems and poor delivery of infrastructure to enable a free flow of new stock and problems with supply are not new, we’ve know about problems with supply for years.</p>
<p>The supply side is also now being influenced by the direct development involvement of Asian investors into our markets, and so they are helping boost supply.</p>
<p>What we are seeing is the offshore investors/developers being very competitive in the market. They move quickly, they bring new ideas and we have to also keep in mind the impact of the local currency. Local and state governments with a development focus are looking for investment and many Asian investors have a critical level of expertise and access to capital that will only see this trend strengthen as more sites are acquired.</p>
<p><strong>Lifestyle a Key Factor</strong></p>
<p>One key point I made during my presentation is that offshore buyers are not coming here to play cricket in the streets, they are anxious to engage in every aspect of society and they take a long-term and very considered view of what and where they buy. Many buyers also have long term existing family connections here.</p>
<p>The flow of Asian buyers and the number of Asian students is one key example that has had a marked impact on some areas of the market in Sydney, and Melbourne and other cities. Big student numbers help drive demand for accommodation, and Sydney’s Broadway/Ultimo area is a dynamic example.</p>
<p>Largely because of student numbers and associated development, the area is heading for a true ‘downtown’ feel with 7-day a week activity. Because of its direct impact on residential property, it’s worth looking in more detail at the impact of the education sector. Figures show that in 1994 total student numbers were less than 100,000, by 2000 that had grown to 150,000.</p>
<p>However in 2009 numbers last peaked at around 620,000 students, numbers then fell away until 2012 and but since then numbers have been on the increase again and in 2014 were heading back towards 590,000, and the biggest sector is students in higher education. Although there’s growth in numbers also attending, and paying to do so, at the primary and high school level. There’s a direct link with more offshore buyers as some apartments are purchased for investments to cater for this demand, or parents buying to directly house their kids.</p>
<p>I think from a marketing perspective this has helped create more vibrant areas, and is a progressive development across several sectors and it is a big boost to economic activity; it’s a good example of why offshore direct investment into residential property is a positive trend. Education is a key part of the service sector economy and growth is required to help re-balance the economy as we exit the mining boom.</p>
<p><strong>Helping to Revive the CBD</strong></p>
<p>And while we have a strong in-flow of funds this is also helping to further shape core CBD residential markets, and is driving demand that will see more and more B &amp; C grade office buildings converted for residential use.</p>
<p>As the CBD evolves it can also be seen that offshore buyers are also having an indirect influence in a more subtle way. For example planners looking to change our local dependence on cars can have apartments with no parking and they can influence demand and size of apartments, all deriving from the fact that offshore buyers take a different view of these two sometimes touchy areas for local buyers, this helps to create diversity of product and supply.</p>
<p>This trend of re-developing secondary office stock will go on and motivate demand for new office inventory for example in Sydney in areas like Barangaroo.</p>
<p>Such investment activity has a deep and powerful impact on our cities, it helps make sure they are ever more dynamic places, and that’s important if Sydney’s continued ambitions of being a major international city are to be realised. We cannot have that ambition on the one hand, and then on the other restrict or shackled offshore buyers, we have to have an open (if regulated) approach.</p>
<p><strong>We are Not Creating ‘Little Asia’</strong></p>
<p>A question I was asked at the Coco Republic event was centred on the idea that some buildings or projects might be focused just on offshore or Asian buyers.</p>
<p>In reality this is not the case, really it is just the opposite, as might be expected in an open market, buildings vary with the buyer profile they attract. Just what might be seen as Asian facilities I am not sure, but as far as design and interiors and common areas are concerned, projects are being built to meet the general demands of the market, we are not setting out to just accommodate Asian buyers.</p>
<p>What is true is that just like any local buyer, offshore buyers do put a lot of energy into selecting the right home or investment. They don’t just rush in and buy anything. They may appear to be dominant in particular areas but this is more as a result of where supply happens to be. Most offshore buyers are astute buyers – they express 5-10 year plans, and re-sale is the key concern.</p>
<p>Like all investors, they also focus on the potential of capital gains in later years and so they look for apartments that have strong appeal to the local market, after all it is often said you can’t exactly pack up an apartment and ship it off in your luggage on the next Qantas flight.</p>
<p>There are some location specific buyer profiles, but again that is not a unique factor, local buyers will be attracted by access to a particular university or school or shopping centre or business park, the same applies to offshore buyers.</p>
<p>I think it’s also worth acknowledging that the big four banks are looking at buyer profiles and they can put a cap on lending to the sector, however offshore buyers can access external funds.</p>
<p><strong>ATO Takes on Part of FIRB Role</strong></p>
<p>The recent changes to FIRB merit some comment. From my experience over the last few months, the government changes have not had any significant impact. Most buyers accept that there is a need to enforce the current laws, the ATO is now checking and perhaps it’s more a failure of policy and not an attempt to contravene the laws that really reflects market sentiment.</p>
<p>As I suggested earlier, the rule of law is important to offshore buyers, this helps make our market attractive alongside the fact that title is secure, here in Australia. I see constant evidence that these buyers never take anything for granted and so they are happy to work within the rules.</p>
<p>The Federal Government is also taking up the benefit’s Free Trade Agreements, and Significant Investment Visas as ways of boosting economic activity and investment, and so I do not think that residential property can sit outside these sorts of policies.</p>
<p>Suggesting that offshore buyers are the main cause of higher prices and tight markets is counter productive. Offshore buyers are looking for a full cultural involvement with Australia and that extends beyond the apartments themselves, they go on and buy furniture, cars and services and so that filters into the economy. If you look at the education sector again, and were to remove foreign students then the sector starts to look pretty poor. I think offshore buyers can do much the same for the housing market, helping to sustain activity and also directly boosting supply via direct development and sizeable investment as is already happening.</p>
<p>Given the existing FIRB rules, it is not reasonable to suggest that offshore buyers are having any more than a marginal impact on the local market, and while that may be more apparent in some pockets, I think it’s a distraction from the failure of long-term policy, that all levels of government need to take responsibility for. This include the chronic neglect of infrastructure, neglect that we are now being reminded of almost daily.</p>
<p>Peter Chittenden is managing director for residential of Colliers International. He can be contacted <a href="https://www.projectagenda.com.au" target="_blank">here</a>.</p>
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pchittenden-eLqUUC8TWW

Offshore investment is essential: Peter Chittenden

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<p>The Australian Prudential Regulation Authority (APRA) released data earlier on residential property exposures by Australian Authorised Deposit-taking Institutions (ADIs). The data was published up to the end of December 2014. The information provides additional insight into the nature of mortgage lending by Australian banks, building societies and credit unions.</p>
<p><img class="aligncenter size-full wp-image-4309" src="https://blog.corelogic.com.au/wp-content/uploads/2015/02/Chart-11.jpg" alt="Chart 1" width="500" height="178"></p>
<p>According to APRA’s data, at the end of 2014, there were $1.278 trillion in residential term loans with $839.8 billion in owner occupied loans (65.7%) and $438.9 billion in investor loans (34.3%). Over the 12 months to December 2014, the value of residential term loans to owner occupiers increased by 7.4% compared to a 12.2% rise in loans to investors. Note that in December, APRA raised concerns about annual growth in investor loan books above 10%. Based on this data, many ADIs would be growing that segment of their book above that benchmark.</p>
<p><img class="aligncenter size-full wp-image-4310" src="https://blog.corelogic.com.au/wp-content/uploads/2015/02/Chart-21.jpg" alt="Chart 2" width="500" height="180"></p>
<p>Focusing on the characteristics of these loans shows a growing appetite for loans with an offset facility and interest-only loans. Meanwhile, the prominence of low documentation loans and other non-standard loans is reducing. </p>
<p>Based on the value of lending, loans with an offset facility increased by 18.4% year-on-year to December 2014, interest-only loans were 15.1% higher, reverse mortgages had increased 1.9% while low documentation loans and other non-standard loans had reduced by -18.6% and -20.2% respectively. </p>
<p>At the end of 2014, a record high 37.5% of outstanding loans had an offset facility and a record high 36.9% were interest-only. Just 0.2% of loans were reverse mortgages, a record low 2.5% were low documentation and just 0.1% were other non-standard loans.</p>
<p><img class="aligncenter size-full wp-image-4312" src="https://blog.corelogic.com.au/wp-content/uploads/2015/02/Chart-31.jpg" alt="Chart 3" width="500" height="183"></p>
<p>At the end of December 2014, the Australian Bureau of Statistics (ABS) estimated that there were 9,448,300 households, while APRA reported that there were 5,213,000 mortgages to Australian ADIs. This indicates that 55.2% of Australia’s housing stock was mortgaged to Australian ADIs. The 55.2% figure is the highest on record, noting that records have only been calculated from the September quarter of 2011. </p>
<p>The ABS also reports the value of residential housing stock at $5.4 trillion and given the $1.258 trillion in outstanding mortgages to Australian ADIs, 23.3% of the value of all housing stock is mortgaged.</p>
<p><img class="aligncenter size-full wp-image-4313" src="https://blog.corelogic.com.au/wp-content/uploads/2015/02/Chart-41.jpg" alt="Chart 4" width="500" height="179"></p>
<p>The average value of the outstanding mortgages, according to APRA’s data, was $241,400 at the end of 2014, with the average loan size having increased by 3.4% over the past year.  Loans with offset facilities ($285,900) and interest-only mortgages ($311,300) had much higher average loan sizes which have increased by 2.1% and 2.8% over the past year. </p>
<p>Reverse mortgages had an average size of $93,100, having increased by 3.8% over the year. Low documentation loans had an average outstanding amount of $204,800 and other non-standard loans had an average of $211,900, outstanding loan sizes have fallen over the year -2.9% and -7.1% respectively.</p>
<p><img class="aligncenter size-full wp-image-4314" src="https://blog.corelogic.com.au/wp-content/uploads/2015/02/Chart-51.jpg" alt="Chart 5" width="500" height="179"></p>
<p>Over the December 2014 quarter, there were 93,231 new loans written by Australian ADIs. </p>
<p>Of these loans, 23,183 (24.9%) had a loan-to-value ratio (LVR) of less than 60%, 38,964 (41.8%) had an LVR of between 60% and 80%, 20,464 (21.9%) had an LVR of 80% to 90% and the remaining 10,620 (11.4%) had an LVR of more than 90%. </p>
<p>Year-on-year, the number of loans with an LVR of more than 90% have fallen by 6.9%.  Over the same period, loans with an LVR of less than 60% have increased by 10.8%, loans with an LVR of 60% to 80% have increased by 13.1% and loans with an LVR between 80% and 90% have increased by 17.7%.</p>
<p>Given APRA had concerns of the rate of growth in the investment segment of the market, this latest data is likely cause APRA some discomfort.</p>
<p>Not only is this data showing the investment segment growing at a rate much higher than 10% annually, but also interest-only lending which tends to be reflective of investment lending is also increasing substantially. </p>
<p>On a more positive note, although investment lending is increasing it is encouraging to see the drop in higher LVR lending above 90%, which suggests that ADIs are being somewhat more cautious around higher risk lending especially considering the overall number of loans being written has continued to grow.</p>
<p>We can expect the regulator will be monitoring lending standards with more focus after the release of this data, particularly from the perspective of investment lending and interest only mortages.</p>
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ckusher-ujnxiKuFQs

Increasing investor interest-only borrowing likely causing APRA discomfort: Kusher

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<p><span>Real Estate Institute of Australia (REIA) CEO, Amanda Lynch, has welcomed the 2015-16 Budget as a win for her small business estate agency members.</span></p>
<p><span>But also one that importantly retains key tax arrangements that benefit housing investment.</span></p>
<p><span style="line-height: 1.3em;">Ms Lynch said the generous asset depreciation measures would particularly benefit the real estate sector</span></p>
<p><span>“The government is to be commended for ensuring stability within the sector in continuing the current tax arrangements as they relate to both Capital Gains Tax and negative gearing.” </span></p>
<p><span>“With other sectors of the economy slowing, housing will play an increasingly important role and it is pleasing to see the government has not tampered with tax arrangements that have been proven to help stimulate housing investment in Australia.” </span></p>
<p><span>“Abolition of negative gearing would result in a dwindling supply of properties for rent, escalating rents and reduced opportunities for low to middle income earning Australians to create wealth for self-funded retirement.” </span></p>
<p><span>She welcome the small business package giving business owners meaningful incentives to hire, invest in equipment "and importantly grow their livelihood.”</span></p>
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jchancellor-FAypfDUnLy

REIA welcomes no change on property taxes in Hockey 2015 budget

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<p>The hardest sell in Australian real estate is convincing anyone they should invest in Tasmania.</p>
<p>It’s been many years since I wanted to try. But the time has arrived to put Tasmania back on the investor radar screen.</p>
<p>For years Tasmania has ranked last or second last among the states and territories on most economic and property indicators. It has a reputation, justified in many cases, as a place that lacks growth of any sort that matters, whether it be population, economic or housing prices.</p>
<p>It’s a cruel reality that it’s easy to get a bad reputation and very hard to lose it. Tasmania is emerging from the deep doldrums that had it ranked last on the list of investment possibilities for most Australians – but it will take time to convince anyone.</p>
<p>But, for the first time in many years, Tasmania’s main cities have been included in the Hotspotting reports that forecast of the growth markets of the future.</p>
<p>Slowly, but steadily the news is getting better. Economic indicators have improved and market dynamics are more positive.</p>
<p><span>A recent NAB report gave a generally optimistic outlook for the Tasmanian economy. It </span>found that the state’s economic outlook had improved over the past year, thanks in part to increased business investment and a domestic tourism renaissance.</p>
<p>“This trend is set to continue as the Australian dollar falls, making domestic holidays more attractive for Australians,” it said. “Meanwhile, a falling unemployment rate alongside a rising participation rate suggest that the fundamentals in the Tasmanian labour market are improving.<span style="line-height: 1.3em;"> </span></p>
<p>“This is further supported by a slowing rate of interstate migration, which points to a stabilising labour force.</p>
<p>“Stronger activity in dwelling construction is also expected to contribute positively to growth.”</p>
<p>The report forecast economic growth of 2.25% in 2015-16 and 2.0% in 2016-17. </p>
<p>The tourism revival is a big part of the brighter picture. A record 988,000 interstate travellers crossed Bass Strait in 2014-15, a 13% increase. With international visitors up 22%, overall visitors totaled 1.15 million.</p>
<p>With Qantaslink adding 11 return flights to Hobart per week, meaning an estimated 60,000 additional visitors per year, that record may be surpassed.</p>
<p>Visitor spending rose 9% (or $150 million) to $1.89 billion last financial year, so the industry packs some punch for the state’s economy.</p>
<p>Against that background, property markets have been slowly improving over the past 12-18 months. Sales volumes have grown in both Hobart and Launceston – in baby steps, but heading in the right direction.</p>
<p>Affordability is a big factor in favour of the Tasmanian market. Hobart’s median dwelling price of $320,000 looks attractive to mainland investors when placed alongside Melbourne’s $560,000 and Sydney’s $770,000.  </p>
<p>Hobart also looks good from the viewpoint of rental returns, particularly units which have a median rental yield around 5.5%, the best among the capital cities. The median house yield, 5.2%, is second only to Darwin.</p>
<p>It brings to mind the last time Tasmania had a genuine property boom, back in 2003/2004, when it caught the property invesetment wave from the mainland. With Melbourne prices now high after a couple of years of solid growth, we may see a similar pattern of behaviour this time around.</p>
<p><em>Terry Ryder is the founder of <a href="https://www.hotspotting.com.au/" target="_blank">hotspotting.com.au</a>. You can <a href="https://mailto:ryder@hotspotting.com.au" target="_blank">email him</a> or follow him on <a href="https://twitter.com/hotspotting" target="_blank">Twitter.</a></em><span style="line-height: 1.3em;"> </span></p>
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terryryder-YECXbqmri2

Tasmania the hardest sell in Australian real estate: Terry Ryder

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<div>There's been a fair amount of talk about negatively geared landlords, and whether they might need to sell property during the rental market disruption.<br><br>You should never judge a 20-30 year investment on what's happening right now, but it's nevertheless worth taking a look at the current state of play.<br><br>With the Airbnb sector effectively shuttered at the present time some areas have seen a 5 to 10 per cent jump in rental listings as landlords seek tenants, especially in areas that are generally popular with students, holidaymakers, or short-stay lets.<br><br>With the borders also effectively closed to New Zealanders, tourists from China and India, and international students, there's likely to be a scramble for tenants over the coming months.<br><br>On the flip side, of course, Aussies aren't heading overseas either, so the net effect is less pronounced.<br><br><div class="separator"><img src="https://1.bp.blogspot.com/-NHMwiB8le_s/Xqi_KI_OKqI/AAAAAAAA1co/f9bzKMhEbmYEpvVXqz0_K20qZL-txRQgACNcBGAsYHQ/s640/STDs.jpg" width="640" height="374" data-original-height="801" data-original-width="1370"></div>
<br>The New South Wales State Government looks set to do its part with the apartment overhang by buying up unsold new apartments from developers. </div>
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<div>The compensating good news for landlords is that some of the available mortgage rates have plunged over recent months.</div>
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<p>The latest figures aren't available yet, but when they are they'll probably show that interest cost serviceability is back to where it was about 35 years ago.</p>
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<p>Some of the 'rack rate' variable mortgage rates are still unreasonably high for investors, but for those taking a  moment to shop around rates may now be very low indeed. </p>
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<div>New owner-occupiers can secure mortgages from close to 2 per cent in some cases, while rates tend to be higher for investors. </div>
<div> </div>
<div>A lot of the statistics quoted on the number of negatively geared landlords are years out of date (the figure was 1.3 million in 2016-17, but interest rates have nosedived since then, so the figure would be lower today). </div>
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<div>Even assuming flat rents, a stylised model suggests that net rental losses will now be the lowest in years.</div>
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<div>Most investors own one rental property, and the <em>average</em> net rental losses will probably be about $1,000 to $1,500. </div>
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<p>The detailed Australian Taxation Office statistics <em>do</em> show that many of those investors aged between 30 and 60 choose to hold an investment property with a reportable net rental loss of between $5,000 and $10,000 per annum, partly to reduce their income tax payable. </p>
<div>Generally this cohort tends to be the white collar set, earning solid incomes in relatively speaking more secure positions.<br><br><strong><span style="text-decoration: underline;">Depreciation report (MCG)</span></strong>
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<div>Moreover, the net rental loss reported to the ATO is not the same thing as the investor's cashflow.</div>
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<div>In fact it's possible to be negatively geared from a taxation perspective but still to have a positive cashflow, due to on-paper depreciation benefits and capital allowances. </div>
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<div>MCG's <em><strong>1000 Assets 2020</strong></em> report showed that there was a big increase in investors buying new property over a period of four years through the construction boom.<br><br>These investors tend to receive very significant depreciation benefits, but I expect there will many investors in this cohort facing negative equity as brand new property tends to...well, depreciate.</div>
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<div class="separator">MCG's study also found that investors have become more aware of depreciation benefits, and as a result they're claiming deductions sooner than they used to. </div>
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<div><em> </em></div>
<div><em>Source: MCG Quantity Surveyors</em></div>
<div><span style="text-decoration: underline;"><em> </em></span></div>
<div>Some property investors will choose to sell, of course.<br><br>But the number of forced sellers will be lower than otherwise would've been the case due to record low mortgage rates, while borrowers have also been extended the option to switch to interest-only loans or take a 6-month repayment holiday. </div>
<div> </div>
<div>A couple of years ago many reports suggested that the interest-only reset would lead to a spike in mortgage arrears, but owners adapted and arrears barely moved. <br><div> </div>
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<strong>PETE WARGENT</strong><em> is the co-founder of AllenWargent property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank">blogger</a>.</em>
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Will investors hold or sell in this troubled time? Pete Wargent

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<span style="line-height: 1.3em;"> </span><span style="line-height: 1.3em;">I read with interest this week that the office block at Sydney's 175 Liverpool was sold off to a Chinese property group.</span>
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<div>As good a time as any, then, to have a quick look at some Chinese investment trends.</div>
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<div>Doug Ferguson of KPMG and Professor Hans Hendrischke of the University of Sydney have teamed up with Knight Frank to produce an excellent and enlightening summary report on this very subject, entitled <a href="https://demystifyingchina.com.au/reports/demystifying-chinese-investment-2015.pdf" target="_blank">Demystifying China</a>.</div>
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<div>It's well worth a read. </div>
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<div>Below are just a few of their key findings.</div>
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<div><strong><span style="text-decoration: underline;">Trend 1 - Commercial real estate investment quadruples</span></strong></div>
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<div>In 2014, Chinese overseas investment in Australia was largely focused on commercial real estate at 46% of the total ($4.4 billion), with mining now accounting for just 11% $992 million)</div>
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<div>Chinese investment in commercial real estate nearly <em>quadrupled</em> in only one year to $4.37 billion.</div>
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<div><a href="/images/2015/06/22/China1.jpg" target="_blank">Click to enlarge</a></div>
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<div><span>A few of the larger investments in 2014 included the Hoyts Group, the Port of Newcastle, the Sheraton on the Park and the flagship Gold Field House at Sydney's 1 Albert.</span></div>
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<div><a href="/images/2015/06/22/China2.jpg" target="_blank"><span>Click to enlarge</span></a></div>
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<div>These trends are only set to continue as the threshold for outbound investment was raised tenfold from US$100 million to US$1 billion in October.</div>
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<div>Incredibly, the report notes that the total assets of China's insurance industry doubled in the past 5 years to RMB 9.6 trillion (US$ 1.6 trillion).</div>
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<div>Investment is now rotating away from mining and resources and into real estate.</div>
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<div>This stunning graphic puts into context just how serious Chinese investment is in the "gateway cities" of Sydney and Melbourne.</div>
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<div>Not that these figures <em>exclude</em> residential property. </div>
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<div><a href="/images/2015/06/22/CHina3.jpg" target="_blank">Click to enlarge</a></div>
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<div>The report found that Brisbane and the Gold Coast are beginning to capture more Chinese residential developer interest, in particular around Brisbane's Newstead and Fortitude Valley (I live there, and yes that is definitely the case).</div>
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<div>Here is a list of some of the key properties bought by Chinese investors in the 15 months to March 2015.</div>
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<div><a href="/images/2015/06/22/China4.jpg" target="_blank">Click to enlarge</a></div>
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<span>The trend is only set to continue, if not accelerate.</span><br><br><strong><span style="text-decoration: underline;">Trend 2 - Currency play</span></strong><br><br><div>Purchasing power for Chinese capital against the Australian dollar has increased massively over the past decade, which only encourages further investment.</div>
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<div><a href="/images/2015/06/22/China5.jpg" target="_blank">Click to enlarge</a></div>
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<strong><span style="text-decoration: underline;">Trend 3 - A New South Wales focus</span></strong><br><br><span>It is interesting to note that a massive 72 per cent of Chinese investment hits New South Wales.</span>
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<div><span>Australia is encouraging further Chinese investment with the Significant Investor Visa (SIV, A$ 5 million) now being refined with a Premium Investor Visa (PIV, $15 million) offering a more expeditious route to Australian permanent residency within 12 months for ultra-high net worth individuals.</span></div>
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<span><span><em>PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>.</em><br></span></span>
<p><em>His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.</em></p>
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Chinese investment rotates to real estate: Pete Wargent

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<p>P<span style="line-height: 1.3em;">eople who invest in real estate through a self-managed superannuation fund should have an exit strategy in mind for their property from the time they acquire it, even if they plan to hold the investment for the long term and pass it down through the family.  This exit may be based on performance criteria as you would do with any other asset, or may be based on income requirements.  It also needs to include the considerations for a number of unexpected circumstances.</span></p>
<p>There are many scenarios in which an SMSF’s trustees may wish to sell a property. They may identify a better investment opportunity elsewhere and want to realise a capital gain on the property.  They have identified their funds have a better opportunity to out perform the market in another property investment.</p>
<p>The fund may need to pay out pension benefits to retired members and find its income is insufficient to cover the payments. Or, one or more of the members may die, requiring the fund to make a lump sum inheritance payment. </p>
<p>Whatever the reason for a sale, the fund should have plans in place for disposing of the investment.</p>
<p>For real estate, this starts with the capital growth drivers that increase the performance of the property and filters down through to the property selection. </p>
<p>The location, type and features of the property should appeal to other buyers, as well as to tenants.</p>
<p>The demographics, economy and employment prospects in the local area will affect buyer demand. Homes in large cities and towns typically sell more quickly than those in regional areas as there is a larger pool of buyers. </p>
<p>In general, residences that are close to transport and amenities such as shops and schools will be easier to both rent and sell than those in less convenient locations. A well-maintained home with parking, practical living spaces and a tidy kitchen and bathroom may be easier to sell than an awkwardly laid out property that needs work. </p>
<p>There are many dimensions to buying well for income and capital gain. People purchasing property through an SMSF, like other property investors, should do their research and consider what will appeal to other buyers as well as to tenants. </p>
<p><strong>Timing</strong></p>
<p>The timing of a property sale will be driven by a range of personal and market factors. </p>
<p>Assuming the SMSF’s trustees have control over the timing – rather than being forced to sell due to a member’s unexpected death for instance.  While the most tax effective option is usually to continue to hold the property in the fund until the members have retired, there may be performance criteria that drive the timing of an exit.</p>
<p>After the members have retired and converted the SMSF into a pension, all fund income, including capital gains, is tax free. Before the members’ retirement, capital and income on investments in the fund are taxed at 15%. </p>
<p>Property owned through an SMSF, like property held directly outside of superannuation, qualifies for a capital gains tax discount if the asset has been held for more than 12 months. The CGT discount for property owned inside an SMSF is one third of the gain. That means the fund pays 15% tax on two thirds of the capital gain if it is sold before its members retire.</p>
<p>Say an SMSF sells a property making a capital gain of $120,000 before its members have retired. The fund will incur a tax bill of $12,000 if it has held the property for more than 12 months. That tax bill could be avoided by timing the sale to settle after the members’ retirement.  However changes in a property market’ stength need to be considered.  In a bear market changes can easily wipe $12,000 from a sale price </p>
<p><strong>Multiple generations</strong></p>
<p>Strategies that involve for holding property through an SMSF across multiple generations of a family are more complicated. </p>
<p>Planning for what will happen when a fund member dies needs to take a variety of factors into account. These include whether the property will be sold after a member’s death; whether there is debt on the property; whether it is positively or negatively geared; how the fund is structured; how fund member are related to one another; and whether they are dependants of the deceased, as defined under superannuation law.</p>
<p>Some SMSF trustees decide to sell the property if one of the members dies. That way any debt can be repaid out of the sale proceeds and the deceased fund member’s share of the remaining equity can be paid to their beneficiaries or estate. </p>
<p>If the trustees would prefer to keep the property after the death of a fund member, the plan should consider how the beneficiaries will be paid their inheritance. It should also consider how the fund will make loan repayments and meet other costs associated with the property without that member’s contributions to the fund. </p>
<p>Superannuation regulations restrict how property can be transferred when used as a vehicle for holding properties over multiple generations. There are tax consequences for each course of action. </p>
<p>Trustees should seek specialist legal and tax advice on the best options for their fund.</p>
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How to plan your SMSF exit strategy: Forrester Cohen

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<p><span style="line-height: 1.3em;">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.  </span></p>
<p>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.  </p>
<p> 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. </p>
<p>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. </p>
<p>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. </p>
<p><span>The age for first time property investors is reducing. Whilst one in five Australians own an investment property, </span>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. </p>
<p>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. </p>
<p>It's exciting times and why not build your own dream now? </p>
<p><em>Jo Chivers is Chief Executive Officer of property development project managers <a href="https://www.propertybloom.com.au/about" target="_blank">Property Bloom</a>.</em></p>
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Never too old to own your future: Jo Chivers

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<p><span style="line-height: 1.3em;">As I sat eating dinner with my two sons, the perfect opportunity arose to explain why investing early is so important.</span></p>
<p>The telly was on and the news story was about uni students degree costs increasing with some changes that the government was proposing to introduce. There was all types of hysteria being reported about degrees costing around $120,000.</p>
<p>I turned to my thirteen year old son and said..."and that's why you need to get into property investing early". </p>
<p>"Yes I'd love for you to have a uni degree but if you can get started on your property investing early then this will build your wealth faster than your first job can fresh out of uni."</p>
<p>I went on to give him a quick overview on how property investing works. It went something like this...</p>
<p>"When you turn eighteen and have some kind of job, you can buy a little apartment somewhere, we'll use the term deposit money we've been saving for the deposit because that's been growing using compound interest." </p>
<p>"What's that?" he said.</p>
<p>"It's earning interest from the bank on what you've saved. Then you add the interest each month to your savings and earn interest on the total amount. This keeps on growing, like magic!" I said "You don't have to do anything but keep putting a bit more money in the account".</p>
<p>"Ok, let's get back to that small apartment you'll be buying. Someone will want to live in that little place of yours and they'll pay YOU rent.  You'll be a landlord!  Whilst the rent may not quite cover all your costs, the government might give you a little bit to help as well".</p>
<p>"wow" he said..."that's cool of them".</p>
<p>Then I thought I'd better explain that he will be paying tax on some of the money he earns. "What's tax?" he asked. </p>
<p>I could see my dinner quickly turning into an economics lesson.  But keeping it really simple I just said "Tax is the money we have to pay to the government when we earn money. They use it to provide stuff for the community like schools and hospitals".</p>
<p>After this very simple overview, I could see him starting to understand.</p>
<p>I said "when you sell this little unit ten or twenty years later, it could be worth double or triple what you paid for it".  And, if you renovate it - add value - you will get more for it.</p>
<p>He was already aware of the concept of adding value thanks to the chats in the car on the way to my development sites.</p>
<p>As he got up to clear the table, I think my message got through when he turned and said, "you know when the value of the house goes up that's like the compound interest magic too isn't it?"</p>
<p>"Yes my darling it is!" I said, ..."but the magic only works if you hold onto the property for a long time."</p>
<p>"OK then", he said. "How much will you give me if I do the dishes tonight mum?". </p>
<p>I laughed and said, that's your job anyway but I have other jobs you can do to earn some extra cash.</p>
<p>My hope is that these little chats all start to gel over time and the concept of starting to invest in property early is put into action in a few years time. We'll see.</p>
<p><em>Jo Chivers is chief executive officer of property development project managers <a href="https://www.propertybloom.com.au/about" target="_blank">Property Bloom</a>.</em></p>
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