Developers and apartment buyers have a narrowing window of opportunity before Brisbane's Olympic infrastructure pipeline begins competing directly with residential construction, pushing up costs, tightening labour supply and making new projects increasingly difficult to deliver.

While Brisbane's apartment market continues to benefit from strong population growth and limited housing supply, industry research suggests the years leading up to 2027 could prove to be the most important period for developers looking to secure builders and buyers hoping to purchase before the next wave of price increases.

A new Colliers report, Brisbane 2032 Olympic and Paralympic Games: Creating Solutions, highlights the scale of the challenge. While thousands of new homes are planned across South East Queensland, the Brisbane Olympic Athletes Village alone will deliver more than 10,500 beds during the Games before being converted into around 1,750 to 2,000 apartments. Equivalent to almost two years of typical inner-city apartment supply, the project will also absorb a significant share of the construction workforce and building materials.

The broader construction pipeline paints an even clearer picture.

Construction Skills Queensland's Horizon 2032 report forecasts Queensland's annual construction pipeline will average $69 billion over the coming years before peaking at $75 billion in 2027-28. Demand for construction workers is expected to increase by 17 per cent to almost 150,000 people, with the industry facing an annual shortfall of around 19,000 workers that could blow out to as many as 35,000 during the peak construction period.

The Olympic venues, athletes village and supporting infrastructure will account for billions of dollars worth of work across South East Queensland through to 2032, creating intense competition for labour at a time when Australia's residential construction sector is already under pressure.

[smartcode_project:default project_id=150489 project_image_fid=373834]

Colliers Queensland Residential Director Andrew Scriven said the convergence of these projects is creating a clear window of opportunity for both developers and buyers.

"From 2027 onwards, the market will shift dramatically," Scriven said.

"Labour will increasingly be locked into government-led infrastructure and Olympic projects, which means private residential developments will face higher costs and tighter margins. The developers who move now are the ones most likely to get projects off the ground."

Scriven said the same dynamic would also affect buyers, with fewer apartment projects expected to launch once construction capacity tightens.

"If you're looking to change your lifestyle over the next five years, now is your window of opportunity to buy."

[smartcode_project:default project_id=150713 project_image_fid=373827]

Developers are already positioning themselves ahead of that window.

Following the success of Monarch at Toowong, Consolidated Properties is preparing to launch two new Brisbane apartment projects in the second half of 2026. They include <a href="https://www.apartments.com.au/new-apartments/gloriette-30-bedivere-street-yeerongpilly-qld-4105">Gloriette</a> at Yeerongpilly Green, a 25-storey tower within one of Brisbane's key Olympic precincts, and <a href="https://www.apartments.com.au/new-apartments/castile-47-skyring-terrace-newstead-qld-4006">Castile</a>, a recently approved 25-storey riverfront development at 47 Skyring Terrace in Newstead.

Hutchinson Builders will deliver both projects, with early works already underway at Yeerongpilly and Newstead expected to commence later this year.

The timing comes as Brisbane's fundamentals continue to strengthen, with strong interstate migration, population growth and vacancy rates remaining below 1.5 per cent.

Colliers Queensland researcher Pragya Sharma said Greater Brisbane is forecast to require around 40,000 new apartments between 2021 and 2031.

"There's a real mismatch emerging between when housing is needed and when it will be feasible to build," Sharma said.

"As a result, the period leading up to 2027 presents a key window of opportunity for developers to secure approvals, funding and construction capacity, while buyers will have greater choice before supply constraints intensify."

Colliers research outlines a critical pre-2027 window to start residential projects before labour squeeze: now is the time to buy

Joel Robinson

Developers, buyers on watch in South East Queensland ahead of construction crunch: Colliers

It's taken less than nine months for developer Sherpa Property Group to sell out all 51 apartments in its <a href="https://www.apartments.com.au/new-apartments/flourish-oasis-palm-beach-7-9-sixth-avenue-palm-beach-qld-4221">Flourish Oasis</a> development in <a href="https://www.apartments.com.au/developments/palm-beach-qld-4221">Palm Beach</a>, over a year before its anticipated completion.

&nbsp;

Located at 7-9 Sixth Avenue, the $67 million development has resonated strongly with both local owner-occupiers and downsizers seeking high-quality apartments within walking distance of the beach, dining precincts and everyday amenities.

[smartcode_project:default project_id=151449 project_image_fid=357458]

Christie Leet, Founder of <a href="https://www.apartments.com.au/developers/sherpa-property-group">Sherpa Group</a>, said the sell-out reflected both the strength of the Palm Beach market and the success of Sherpa's community-first approach to development.

"The sell-out of Oasis is a fantastic outcome and reinforces the strong demand we're seeing for thoughtfully designed apartments in lifestyle locations," Leet said.

"From the outset, our vision was to create a development that genuinely enhanced the Palm Beach community while providing residents with exceptional homes and wellness-focused amenities.

"We've been incredibly encouraged by the level of local support throughout the campaign, 72.5 per cent of buyers are locals, with a significant proportion of purchasers choosing Oasis as their future home rather than an investment."

[smartcode_project:default project_id=151449 project_image_fid=357463]

Construction is now progressing following development approval, with trusted builder LPS Group delivering the project and completion anticipated in Q3 2027.

Oasis forms part of Sherpa Group's successful Flourish collection, which has become recognised for its focus on wellness, community and elevated coastal living.

[smartcode_project:default project_id=151449 project_image_fid=357469]

Residents will have private access to a rooftop amenity space featuring a pool, gym, sauna, steam room, hot and cold plunge pools, spa and barbecue facilities.

"The success of Oasis demonstrates that buyers continue to prioritise quality, location and lifestyle," Leet said.

"We are proud to have delivered a project that has resonated so strongly with the market and look forward to bringing Oasis to life for our future residents."

Sherpa recently launched <a href="https://www.apartments.com.au/new-apartments/flourish-soleira-palm-beach-1150-1160-gold-coast-highway-palm-beach-qld-4221">Flourish Soleira</a>, its third instalment of the Flourish brand in Palm Beach following Flourish Oasis and <a href="https://www.apartments.com.au/new-apartments/amargo-6-12-sixth-avenue-palm-beach-qld-4221">Flourish Amargo</a>.

[smartcode_project_cta:default project_id=151449]

Sherpa sells out Flourish Oasis in booming Palm Beach

Urban Property Group's <a href="https://www.apartments.com.au/new-apartments/la-vera-macquarie-park-94-talavera-road-macquarie-park-nsw-2113">La Vera</a> is leading the next phase of Macquarie Park's residential evolution, with the new apartment development set to become the first of several new apartment projects in the precinct to complete.

The 169-apartment building has now topped out ahead of its scheduled completion in the third quarter of 2026, as new residential investment continues to reshape one of Sydney's largest employment hubs into a true mixed-use precinct.

[smartcode_project:default project_id=134951 project_image_fid=368645]

Cox Architecture has designed La Vera to capture the best of its unique positioning on Talavera Road, orienting the building towards Lane Cove National Park.&nbsp;The building features a sculpted northern façade with flowing curves inspired by the surrounding landscape, while its city-facing elevation adopts a more structured architectural expression to maximise skyline views.

"The vision for the project was to conceive a building that adopted an organic and curvilinear form to the northern portion that faces the Lane Cove National Park," <a href="https://www.apartments.com.au/architects/cox-architecture">Cox Architecture</a> Director Felipe Miranda said.

"The residents that reside in the northern portion of the building benefit by having beautifully crafted curved balconies that speak to the natural context and heighten the relationship of their internal living spaces to the external balconies."

[smartcode_project:default project_id=134951 project_image_fid=358802]

La Vera offers a diverse mix of one, two, three, and four-bedroom configurations, with prices currently starting from $740,000. Buyers so far have been a mix of Sydney-based investors,&nbsp;metro commuters, owner-occupiers and downsizers from surrounding North Shore suburbs.

Both investors and owner-occupiers have been drawn to La Vera's proximity to Macquarie University, Macquarie University Hospital, Macquarie Centre and the Sydney Metro, infrastructure that supports both strong rental demand and a convenient lifestyle for residents.

The apartments feature full-height glazing, timber flooring throughout living areas, stone kitchen benchtops, SMEG appliances, floor-to-ceiling bathroom tiling and ducted air conditioning.

Residents will have access to a rooftop recreation level featuring a swimming pool, sauna, barbecue facilities and landscaped relaxation areas, complemented by additional communal space at ground level. Many apartments enjoy uninterrupted views across Lane Cove National Park, reinforcing the project's connection to its natural setting.

[smartcode_project:default project_id=134951 project_image_fid=364551]

<a href="https://www.apartments.com.au/developers/urban-property-group">Urban Property Group</a>, a family-owned developer and builder with nearly four decades of experience, holds a 4.5-star iCIRT rating and was Australia's first developer to introduce 10-Year Latent Defects Insurance (LDI). La Vera is the first apartment development in <a href="https://www.apartments.com.au/developments/macquarie-park-nsw-2113">Macquarie Park</a> approved to offer the additional insurance protection, alongside a five-year warranty on SMEG appliances.

Urban Property Group CEO Patrick Elias said the additional protection reflects changing buyer expectations in the off the plan market.

"Consumers are a lot more weary and a lot more concerned in buying off the plan than they ever have been. Having LDI is a tool to portray the confidence that we have in our product, and a confidence we want buyers to share," Elias said.

Following completion of the building later this year, buyers will move into their apartments well before Christmas.

[smartcode_project_cta:default project_id=134951]

La Vera closes in on completion as Macquarie Park continues residential transformation

Brisbane developer Red &amp; Co's decision to include dual key apartments in its debut Gold Coast apartment development, <a href="https://www.apartments.com.au/new-apartments/como-varsity-lakes-22-lake-street-varsity-lakes-qld-4227">COMO Varsity Lakes</a>, is proving to be one of the project's biggest drawcards, with buyers quickly snapping up the flexible residences.

More than half of the project's 36 dual key apartments have already sold, helping drive COMO beyond the 50 per cent sold mark within the first month of launch.

The strong response highlights growing demand for apartment designs that can adapt to changing lifestyles, with buyers increasingly looking for homes that accommodate multi-generational living, provide rental income opportunities or simply offer greater flexibility over time.

Located on the shores of Lake Orr, COMO will deliver 156 apartments across 16 levels, with the dual-key residences forming a limited release within the broader development.

Each combines a primary two-bedroom apartment with a fully self-contained studio on a single title, connected by a shared foyer and lockable internal door. The design allows owners to house ageing parents, adult children or guests while maintaining privacy, or lease the secondary residence to generate additional income.

Just 17 of the original 36 dual key apartments remain available.

[smartcode_project:default project_id=135546 project_image_fid=367096]

The innovative configuration combines two fully self-contained residences on a single title, typically comprising a primary two-bedroom apartment alongside a separate studio residence, connected via a shared foyer and lockable internal door.&nbsp;

The model is proving particularly attractive to owner occupiers navigating changing family dynamics and the realities of the current housing crisis.&nbsp;

[smartcode_project:default project_id=135546 project_image_fid=363511]

<a href="https://www.apartments.com.au/project-marketer/npa">NPA</a>&nbsp;CEO Andrew Erwin said dual key living was resonating strongly with modern buyers because it delivered both financial flexibility and practical lifestyle benefits.&nbsp;

“The housing crisis and rising cost of living are fundamentally changing how Australians think about home ownership,” Erwin said.&nbsp;

“Dual key apartments provide a genuine solution for families who want to stay connected while maintaining independence. Parents can help adult children save for a future home, ageing parents can remain nearby without moving into aged care, and owners still retain privacy and flexibility.

“Importantly, buyers are also recognising the financial advantages. It creates the opportunity to generate additional income from part of the home without the holding costs associated with owning a separate investment property.”&nbsp;

[smartcode_project:default project_id=135546 project_image_fid=363509]

Unlike traditional dual occupancy arrangements, the residences operate under a single title, meaning owners only incur one set of body corporate fees, council rates and holding costs.&nbsp;

The secondary residence can also evolve over time - functioning as guest accommodation, a home office, creative studio or private retreat before later becoming an income-producing asset.

<a href="https://www.apartments.com.au/developers/red-co">Red &amp; Co</a>&nbsp;Director and Co-Founder David Laverty said the strong early sales reflected growing buyer urgency and changing priorities within the market.&nbsp;

“Securing more than half of COMO’s residences within such a short timeframe is an outstanding result and a clear endorsement of both the design and location,” Laverty said.&nbsp;

“Buyers are responding to the combination of location, connectivity and amenity, but ultimately it’s value relative to other East Coast markets that is driving enquiry.”&nbsp;

“We’re also seeing strong interest from owner occupiers looking for homes that can adapt with them over time. Flexibility has become one of the most important considerations for buyers in today’s market.”&nbsp;

[smartcode_project:default project_id=135546 project_image_fid=363515]

Designed by <a href="https://www.apartments.com.au/architects/bda-architecture">BDA Architecture</a>, COMO features a mix of one-, two- and three-bedroom residences with 2.7-metre ceilings and larger-format floorplans aimed at owner occupiers, downsizers and lifestyle-focused buyers.&nbsp;

The development will feature an extensive rooftop recreation and wellness offering including a 25-metre lap pool, sundeck, barbecue and dining areas, gym, sauna, plunge baths, landscaped gardens, wellness spaces and rooftop pickleball and paddleball courts.

The remaining dual key apartments range from 137 sqm to 167 sqm and include generous three-bedroom layouts with separate self-contained studio accommodation and dual parking.&nbsp;

Erwin said the dual key concept represented a broader shift in how Australians would live in the future.

“People want homes that can evolve with their lives,” he said.&nbsp;

“A dual key apartment can suit a family today, support an ageing parent tomorrow, and potentially generate income later on. That adaptability is becoming incredibly valuable in the current environment.”

Prices currently range from $2,115,750 to $2,583,000.&nbsp;

[smartcode_project_cta:default project_id=135546]

Inter-generational living drives demand for COMO’s dual key apartments as housing pressures reshape buyer priorities 

Builder-developer&nbsp;<a href="https://www.apartments.com.au/developers/ceerose">Ceerose</a> has doubled down on its Leichhardt ambitions, lodging its second State Significant Development Application (SSDA) in the suburb in the last six months.

Their newest proposal seeks to transform a former industrial precinct into a new residential community centred around the adaptive reuse of one of the site's heritage warehouse buildings.

The new project, on a 6,930 sqm block at&nbsp;<a href="https://www.apartments.com.au/new-apartments/40-76-william-street-leichhardt-nsw-2040">40–76 William Street</a>, will bring more than 200 apartments to a suburb that has seen little to no new supply in recent years. It follows Ceerose's late 2025 SSDA for a mixed-use apartment project on nearby Parramatta Road, signalling the developer's growing investment in Sydney's Inner West.

Ceerose Founder Edward Doueihi told Apartments.com.au the developer’s long-standing presence in Leichhardt and the Inner West had given it a strong understanding of how the area has evolved and where its future opportunities lie.

“Ceerose has had a long-standing presence in Leichhardt and the Inner West, giving us a unique understanding of the area’s evolution and future potential,” Doueihi said.

“Having delivered projects throughout the region, we have witnessed the suburb’s transformation first-hand and understand the opportunities for its continued growth.”

Doueihi said that understanding also informed the planning process, with a comprehensive Stakeholder Engagement Outcomes Report prepared before the application was lodged.

The report identified the key issues and concerns raised by neighbouring residents and other stakeholders, allowing those matters to be considered and incorporated into the design where appropriate.

He said the delivery of additional housing would also play an important role in supporting the revitalisation of Norton Street and the Italian Forum.

“By increasing the local residential population, the development is expected to strengthen demand for local businesses, encourage further investment, and help restore the vibrancy that made the precinct a thriving destination in the early 2000s.”

<img alt="First look: Ceerose returns to Leichhardt with 203-apartment adaptive reuse proposal at former warehouse site" data-entity-type="file" data-entity-uuid="7258c54c-8167-479e-8361-2d5fca9915b4" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Appendix%2010B%20-%20CGI%20-%20View%202.jpg?VersionId=S9DQfxu_jpcB5LrAEYFUbyMzg5odW6i5" />

Designed by <a href="https://www.apartments.com.au/architects/woods-bagot">Woods Bagot</a>, the redevelopment would involve the demolition of four existing industrial buildings while retaining and adaptively reusing the site's most significant warehouse. The retained structure would anchor a new residential precinct comprising five interconnected buildings arranged around a large central landscaped courtyard, with heights stepping from five storeys along the surrounding residential streets to 11 storeys at the William Street corner.

According to the Architecture Design Report by Woods Bagot, the proposal "seeks to create a residential village centred around a generous green heart while celebrating the site's industrial heritage through the adaptive reuse of the existing warehouse building."

The development would comprise 203 apartments, with 188 proposed as build-to-sell residences, alongside 15 affordable housing apartments.

Rather than treating the retained warehouse as a standalone heritage object, Woods Bagot has sought to weave the site's industrial history throughout the masterplan. The proposal retains the north and west facades of the landmark corner warehouse, while new buildings reinterpret the site's brick-and-steel industrial language through their material palette and architectural expression.

<img alt="First look: Ceerose returns to Leichhardt with 203-apartment adaptive reuse proposal at former warehouse site" data-entity-type="file" data-entity-uuid="9e8c64c2-881b-49e1-8c90-6b6acaaa45b6" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Appendix%2010C%20-%20CGI%20-%20View%203.jpg?VersionId=Qm8_8H_Xrg_sc4Mdjc59vlAcKF_5wRTb" />

The design is organised around what Woods Bagot describes as a "green heart", a landscaped communal open space that reinstates the leafy character removed when the site became an industrial storage facility. A new pedestrian laneway running through the site would improve permeability between William, North and Francis streets, linking residents through landscaped public spaces while activating the ground plane.

Residents would have access to communal gardens and shared recreation areas distributed throughout the development. Sustainability has also been prioritised, with the project targeting an average 7.9-star NatHERS rating. Proposed initiatives include rooftop solar generation, rainwater harvesting, passive solar design, naturally ventilated lobbies, extensive cross-ventilation and the reuse of existing building fabric to reduce embodied carbon.

The adaptive reuse strategy became a defining feature of the application after heritage investigations found only one of the site's industrial buildings could feasibly be retained. The Heritage Impact Statement concludes that preserving the key warehouse façades while referencing the site's industrial character throughout the new development provides an appropriate balance between renewal and conservation.

<img alt="First look: Ceerose returns to Leichhardt with 203-apartment adaptive reuse proposal at former warehouse site" data-entity-type="file" data-entity-uuid="efffafdb-594f-4e2b-a067-921fd51c05e1" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Appendix%2010D%20-%20CGI%20-%20View%204.jpg?VersionId=DPmE4.k16YRt0i27hEZVtJAffarpvUfx" />

"Retention and adaptation of the site buildings has been explored but found not to be feasible except for the tallest building, whose street facades will be retained," the heritage report states.

"The proposed building will interpret the brick and steel character of the subject site, including reuse of some components and construction of a large 'sawtooth' structure in the proposed open space."

<img alt="First look: Ceerose returns to Leichhardt with 203-apartment adaptive reuse proposal at former warehouse site" data-entity-type="file" data-entity-uuid="3bfef2b5-83f5-40cd-9cab-767092f34266" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Appendix%2010E%20-%20CGI%20-%20View%205.jpg?VersionId=7asb3i_ql4ybbuJOUb5UHBEIy0Q9t.DF" />

The William Street site is located around 300 metres from Leichhardt North Light Rail station and a short walk to Norton Street's retail, dining and hospitality precinct. The surrounding area has increasingly become a focus for urban renewal given its proximity to public transport and the Parramatta Road corridor.

Doueihi founded Ceerose in 1998 and has grown the business to become one of Sydney's more active apartment developers in recent years, with completed projects including The Alex Collective in Alexandria, Abbie's Lane in Annandale, and the award-winning Munro House in Elizabeth Bay. They are currently delivering Belgravia, 17 luxury apartments in Potts Point.

First look: Ceerose doubles down in Leichhardt with adaptive reuse of former warehouse site

Ask Margaret

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Hi Margaret,
I am currently working full-time earning $875 per week after tax. I want to buy a franchise coffee business that is about $500,000 inclusive of everything.
If I buy a property and build a duplex, strata subdivide and then sell one for $600,000 and keep the other, can I use that money to invest in the coffee business?
Or does that $600,000 need to go back to the home loan repayment?
Assuming: 
<ul>
<li>Purchase price of property - $650,000</li>
<li>15% deposit no mortgage insurance - $97,500</li>
<li>Construction loan - $450,000</li>
<li>Total loan - $650,000 + $450,000 - $97,500 = $1,002,500</li>
<li>Repayment (5%) - $4,062 per month</li>
<li>Rental income from one half of duplex ($450 per week)</li>
</ul>
Kind regards,
Daniel
Margaret's answer on the next page. Please click below.
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Hi Daniel,
Regardless of what you intend to use the money for at the end of your project, when you borrow from a bank to purchase or develop residential property, you must at all times have in place enough security to cover the outstanding balance of the loan in the proportions required by the maximum LVR allowed.
In your case, you are after a 15% deposit loan ($85% loan). So, when the time comes to sell one duplex half, you must pay back enough of the original loan to ensure that the remaining loan does not exceed 85% of the remaining security.
In your case, if you ended up with two duplex halves each worth $600,000 and you sold one, the remaining security value is $600,000. This means the maximum loan you can have outstanding, at 85%, is $510,000.  If your loan was $1,002,500 you would have to repay $492,500.  You can keep the remaining $107,500.
Having said that, it’s probably not going to be so straightforward. 
Here are some things to think about:
<ol>
<li>Developments always cost far more than people realise.  Subdivision alone can run to more than $100,000 by the time you add a driveway and or even begin construction.  There are many costs and council contributions that people simply never think about that can blow out a development and mean that you don’t make any money or worse, come out behind the eight-ball. 
</li>
<li>When you sell you will pay capital gains tax at your highest marginal rate of tax.  If you sell inside 12 months, you pay CGT on the full gain.  So, let’s say the gain after allowable costs is $100,00, and you are in the 45% tax bracket, you pay $45,000 CGT.  If it is more than 12 months, the gain would be halved to $50,000 and you would pay $22,500. 
</li>
<li>When you sell a duplex, you will lose its rental income and when you start your coffee business you will be considered a new business. This will change your borrowing capacity – in fact it will probably be two years before you can borrowing anything.</li>
</ol>
I gather you are thinking of being able to put in place this loan now, while you are working, and then use the funds once you sell the property to provide a home loan rate loan for the business.  Unfortunately you won’t be able to achieve this.  Some lenders will, however, provide franchise finance and include a fit-out loan too, so this is the pathway you are better going down. 
If I may observe – starting a new business takes a lot of time and effort and I am not sure you want to complicate that by also taking on a development of this type.  Simplify your life by concentrating on one project at a time! 
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mlomas-KC9MUPZ6Ca

Can I use the profits from a duplex development to start up a new business? Ask Margaret

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Hi
There is a property I'm interested in is going to an auction while I'm travelling interstate. What's involved in engaging a professional to bid for us and sign the paperwork on our behalf?
I looked into a few buyer's agents but they were after 1% commission, which I believe is way too much just for bidding on the day. I have done my own research so don't need this as part of the service it's purely the bidding.
Also what's involved in signing the paperwork if we are not physically present, could this be done electronically or via fax?
Thanks for your assistance.
Regards
Katie
Margaret's answer is on the next page. Please click below.
<hr class="system-pagebreak">
Dear Katie,
Having someone else bid for you on auction day is becoming more and more common these days, with people either telephoning in bids and having them presented by someone else, or appointing someone else to bid for them either in their presence or when they cannot attend the auction themselves.
In your case, you have done all of your research and so you should find someone you can trust to attend on the day and make the bids.  Depending upon how skilled you think they may be, you might want to phone your nominated person when the auction starts and make the bids yourself, using that person to simply present your bids.  If you are not available to do this, be sure that you carefully coach the person on how much you would like to pay and what your upper limit is.
While you can appoint someone else to bid for you, be careful when it comes to signing on your behalf. Although there is a nominee clause in all contracts, this can result in double stamp duty being paid when the contract passes from the nominee to you, and this can be very expensive.
The person bidding on your behalf must give the auctioneer written authority from you before the auction starts. You will need to furnish them with a letter which includes your name, address and details of proof of identity, such as your driver's licence or passport.
It also needs to contain an acknowledgement that the person on whose behalf bids are made has been given a copy of the conditions that are applicable in respect to the sale, and has seen a  copy of the contract.
If your bid is successful, and depending upon the state you are buying in, either the auctioneer can sign the contract on your behalf, or you may wish to have a power of attornery granted to your representative prior to the auction.  In some states a power of attorney can be 'limited', where you provide a power of attorney for a single instance, such as bidding at a particular auction.  These powers of attorney forms can usually be downloaded from the internet from the government department in your state.
Kind regards
Margaret
Have a property question?  <a href="mailto:askmargaret@propertyobserver.com.au" target="_blank">Ask Margaret!</a>
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Should I hire a buyer's agent? Ask Margaret

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Hi Margaret, 
What would be your thoughts on ways to mitigate the risks involved in hotspots? 
One such example would be Gladstone which has good strong fundamentals but is now experiencing oversupply.
The reason I am asking is that while a location is flagged as having good capital growth and yield,  I believe it is also important that I protect myself against overzealous developers who contribute to oversupply.  I am sure the above happens to many locations too.
Assuming that I've bought in a hotspot before a majority of the building stocks are dumped into the market, I might still be experiencing long periods of negative growth in a solid location when that happens.  I would be losing money if I sell out, but holding it would be extremely "painful".    
Thanks,
Adelyn
Article continues on the next page. Please click below.
<hr class="system-pagebreak">
Hi Adelyn,
The first thing we have to sort out here is ‘what is a hotspot’. 
Here, you say that Gladstone is an example of a hotspot. In reality, Gladstone is an example of an area that some property experts, and many property spruikers, have said is a hotspot. But is it?
In my opinion, no, but then again, this is just my opinion, and it will (often) be different than others.  I personally define a hotspot as an area which possesses an abundance of growth drivers, the capacity to experience ‘generational’ growth (where growth occurs steadily throughout an entire generation), a limited land supply, and very few people buying there as it has yet to be discovered and pillaged by the experts.
Growth drivers include things such as diverse employment opportunities, significant infrastructure development, low land supply and a population growing faster than the national average.
If we compared Gladstone to that description, it comes up wanting, and for that reason I feel that Gladstone does not qualify to be called a hotspot.  Instead, Gladstone is a speculative investment which requires precise market timing, both in and out. 
There are significant drawbacks attached to areas such as Gladstone – the single industry employment (mining), the itinerant and unstable population, the existence of too many developers selling properties at prices which bear no relationship to intrinsic value, to name a few. 
<a href="/expert-insights/the-tenant-in-my-mining-town-investment-has-done-a-runner-ask-margaret">Investors with money to lose who are willing to gamble </a>can make money in such a market but they must accurately read the micro economy to establish when to buy and when to sell. 
Ordinary investors attempting to create a sound portfolio which has an identifiable time frame (as in they know when they are likely to want to exit) should not be considering investing in such volatile markets where the fortunes are linked to an industry which is completely governed by the world economic situation.
The other thing to remember is that the word ‘hotspot’ these days seems to apply to the areas being written about by the ‘experts’. 
I can assure you that if it is being written about, you are far too late to be buying there. Thousands of people are reading the same report as you, and many of these will attempt to jump into such a market, at the same time.  This creates an upward pressure on prices and seems to justify that the area is actually a hotspot after all!
It’s a little like insider trading for shares – let the word out, everyone buys in and makes it look like the share is good after all, when in fact it is the market pushing up the price, not the underlying value.
The best way for you to be sure that what you buy is actually a sound investment, with the capacity to perform year on year, is to learn how to choose the right area yourself. 
In this world of instant gratification and busy lives every one wants someone else to do it for them - tell them where to buy, find a property for them, or worse, sell a property to them.  This is the best way to set yourself up for a poor or inappropriate buy which performs less well than  you would have liked and leaves you vulnerable to market falls. 
Learn what really makes an area perform for the long-term, and you’ll be able to scour the country and choose areas which are pre-hotspot, long before you read about them in the magazines.
Regards, 
Margaret
Have a property question?  <a href="mailto:askmargaret@propertyobserver.com.au" target="_blank">Ask Margaret!</a>
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What are the risks involved in buying in a 'hotspot'? Ask Margaret

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Hi Margaret
I'm buying my first home in Melbourne and I am worried about how this will effect my investments later if I borrow at 90%.
Does it matter, or should I be saving for longer or buying cheaper?
Ive been told that I should buy as soon as I can even if it means LMI?
Regards,
David
Margaret's answer on the next page. Please click below. 
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Hi David,
I always wonder who is doing the telling when investors say ‘I have been told to…’ 
Very often it is either someone wanting to sell you something like a property, a loan, or a training program, or a well-meaning friend who may have done some reading or been to a course. Or it could just be that they did whatever it is they have been told to do and experienced some success from it.
The important thing about any property investing strategy is that there is simply no one size fits all approach. 
When it comes to the level of gearing you should be undertaking, there are many things to consider such as:
<ul>
<li>Your personal risk profile – are you conservative, balanced or assertive? Your results from profiling your risk will determine the level of gearing you should use.</li>
<li>Your time till retirement – if you borrow 90% and it all goes horribly wrong, how many more years of earning capacity do you have to get back on top?</li>
<li>Your present income levels – if your property experiences vacancy and you have high levels of debt, can you maintain the mortgage?</li>
<li>The security of your job – if you are unsure about your tenure then you will not want to be taking on high levels of borrowing.</li>
<li>Your other assets.  If you have little in the way of other assets, a 90% loan can be a big mistake.</li>
<li>The lender’s mortgage insurance – at up to 3% of the loan amount, this will further reduce your equity to a very risky 7%. Add stamp duty and borrowing costs and you will likely owe more than your property is worth.</li>
</ul>
One of the things I find about proponents of high levels of gearing, such as a 90% loan, is that their thinking is what I call ‘good time’ thinking.  They operate out of a misplaced notion that property will always go up and that it will only be a matter of time before your equity increases. 
Nothing can be further from the truth and, in addition to the fact that there are many moments in times past when property has indeed fallen (such as after a crazy period of buyer frenzy such as we have been seeing in Sydney), there is a good chance tha, as a first time investor your first property may well perform far less well than you had hoped. 
You are new to this and your first property purchase brings with it the greatest risk you are likely to ever have of choosing badly, not doing the research well or falling prey to a spruiker who sells you something with an upside bigger to him than it is to you!
There are many things you can do from here, including saving more, biting off less with a cheaper property, or maybe even seeing if your parents are interested in helping out a little by offering a little bit of their equity to get you started. 
Whatever you do, don’t try to do it alone.  Get some good quality advice from someone with no vested interest in what you are about to do, and get educated before you start.
Have a property question? <a href="mailto:askmargaret@propertyobserver.com.au" target="_blank">Ask Margaret!</a>
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What level of gearing should I accept for my first investment? Ask Margaret

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Hi Margaret,
I am buying my first home at 30, having rented before this with a friend.
I have got about $50,000 saved as a deposit and some other money set aside for costs, and have been given the option to either buy on my own or with the friend I’m renting with.
What are the benefits of buying with him and should I be considering it?
Thanks,
G.
Margaret's answer on the next page. Please click below.
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Dear G,
I am often asked by many investors whether or not they should be buying property with a friend, a sibling or with a group of other investors.  It’s a common thing for people to buy property with a spouse, and if you think about that, you are already taking the good with the bad when it comes to a life partner. Sharing real estate is only another facet in the complex fabric of life.
When it comes to a friend, you could be tossing up buying together for a number of reasons.  It could be that you can’t afford to go alone, or can’t save enough of a deposit.  Another reason may be that you feel more confident buying with someone else than you would alone.  Whatever the reason, it might seem like a good idea at the time, but like a lot of good ideas, it can all come apart later on.
If you are tossing up whether or not to buy with someone who is not your spouse or life partner, it can help if you go in with your eyes wide open. 
Here are just a few of the things you must know:
<ol>
<li>
You can trust yourself, but.... You probably know that you can afford to meet the repayments, and that in times of stress you have enough money to be able to see through until the good times.  You know that your job is secure, and so you will always have a steady income flow.  But can you be as sure about the person you are planning to buy with? It is easier when it is your spouse – when you get married or choose to live together it is always for better or worse.  And it may seem easy when we are talking about a brother or a sister, a mum or dad or son or daughter (although often that is not the case). However, when it comes to friends you can never be sure how much of what they are telling you is actually true.  It’s amazing how quickly someone’s circumstances can change, and the last thing you need is to be left holding all of the commitments on a property whose title you only half own.  
</li>
<li>
Difficult financing arrangements Where all parties are bringing in the same amount of money as a cash deposit, and a joint loan, secured by only the property in question (the one being purchased) is accessed, this may remain relatively simple. All parties pay their required portion of the debt, receive their share of the income and complete separate tax returns claiming their own tax deductions. Where differing amounts are provided by each person, or where the other party may be borrowing against the equity they have in another property and bringing in their deposit via another loan from elsewhere, things get tricky. All bills will then need to be divided up according to the original allocation and the tile will need to reflect the different proportions of ownership. The risk increases too, if one party is using a loan for their deposit – it creates a higher risk of that person not being able to manage their repayments. It is useful to note here also that, when you sign mortgage documents for a debt where another party is involved, you become jointly, and severally, responsible for the repayment of that debt.  If the other party takes off to Rio, you cannot call your bank and offer to repay only your half, or to keep repayments on only your half going.  You become responsible for the entire debt, while at law you still only own half (or your share) of the property. 
</li>
<li>
What’s yours is mine – including all your debt! Since you become jointly and severally responsible for any loan you take out with other people, the commitment for the entire loan, rather than half of it, may be considered when establishing your serviceability with a bank.  So, you may have a loan of $300,000 with two other people, and your share is $100,000, but a bank may consider that you have a commitment to the entire $300,000. Conversely that same lender will only consider the income on your third of the property, since you only own a one third share. This may limit your ability to borrow additional funds to undertake more borrowing to buy investments in your name only, and could hamper your ultimate progress. 
</li>
<li>
Using the growing equity Imagine if the equity in your shared property grew so quickly that you were ready to buy again soon – but you decided that you did not want to buy with that person again. Unless you are prepared to liquidate, lose a fair portion in capital gains tax and start again, unfortunately you may have difficulty using this equity to invest further. 
</li>
<li>
Time to get out – but do you both agree? Your life suddenly changes.  You meet the perfect partner and want to move to the country, you are offered a divine job overseas for 20 years, or you simply want to cash out and take a Harley around route 66.  If your timing does not coincide exactly with that of your fellow property owner, you may not be able to take advantage of this great new opportunity because you cannot realise your assets.  Unless you are both ready to make a major change, owning property with others can often prevent you from taking on a great opportunity which may come along out of the blue. 
</li>
<li>
When you are doing all the work. Owning a property is not without its hard work.  If you suddenly find yourself doing all the work, it may seem like an unfair thing that you are only accessing your title’s share of any growing equity.  You may believe you are entitled to a greater share, but at law, this is not possible.  You cannot really know the capacity of another person to do their bit until after the deed is done, and by then it may be too late.
</li>
</ol>
In summary:
If there is absolutely no other way for you to get into the market than to do it with another, non spouse person, then at least sign a partnership agreement at the commencement of the deal in which you cover every possible eventuality and agree to a procedure to manage it. Going in with your eyes open may prevent a major disaster in the long-term. So will not investing with others at all!
Regards,
Margaret
Have a property question? <a href="mailto:askmargaret@propertyobserver.com.au" target="_blank">Ask Margaret!</a>
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Should I buy a property with a friend? Six things to consider first: Ask Margaret

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Hi Margaret,
I have already met eligibility requirements to buy a property with my First Home Saver Account (FHSA) money. 
Do you know whether i still have to meet the 'live in the property for at least six months over the next 12 months' requirements given the 12 months will extend beyond the date that this rule is abolished?
Regards,
FHB
Margaret's answer on the next page. Please click below.
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Hi FHB,
The First Home Saver Account (FHSA) was an initiative by the federal government to boost the savings of first home buyers by providing incentives via an additional deposit and tax advantages to this account as long as you placed your own savings in it. 
The rules were simply that you use it only on your first home, do not draw anything out of it for four years, and pay at least $1000 a year into the account over at least four years. In return the government made a 17% contribution on the first $6,000 and only taxed any earnings at 15%. The funds from your first home saver account could only be used to buy a property you intended to live in. The occupancy rule stated that you must live in the home for at least six months and it must be your main residence.
The six-month period must start within:
<ul>
<li>12 months of you becoming the home owner (from settlement date) or;</li>
<li>12 months from the day construction was completed if you are building a home</li>
</ul>
If you failed to use the funds on your first home, it had to be rolled over into superannuation.
However these accounts did not take off as expected and so the following changes will occur:
<ul>
<li>Accounts opened after 7:30pm Tuesday 13 May 2014 will not be entitled to the government contribution</li>
<li>Existing account holders will not be eligible for a government contribution on personal deposits after the 2013-2014 financial year</li>
<li>Tax and social security concessions will cease 1 July 2015</li>
<li>Restrictions on withdrawals will be removed on 1 July 2015</li>
<li>First home saver accounts will be abolished on 1 July 2015</li>
</ul>
Having said all of that, as of today the accounts are current and this means that the requirements are current.  Since ‘living in the property for six months starting sometime within the first 12 months’ could potentially mean that your six months might feasibly start after the abolition of this rule, one would expect that it would no longer apply at that date. 
However, as you would be accessing the funds during the time that the scheme is still current, you will most likely be required to fulfill your obligations and start living in the property, staying there for the full six months, regardless of when this falls.  The government has provided the benefit and so you should follow the rules relating to that benefit.
If I were you I’d make a call to the Office of State Revenue in your state and clarify their position.  If they do, be sure to get it in writing so that you can prove that this is what you were told, if questioned at a later date.
Regards,
Margaret
Have a property question?  <a href="mailto:askmargaret@propertyobserver.com.au" target="_blank">Ask Margaret!</a>
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Do the First Home Saver Account eligibility requirements still apply?

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Dear Margaret,
I have a mortgage of $420,000 and my home is worth $750,000.
Is my equity $330,000 and would the bank theoretically allow me to borrow this amount and buy an investment property to rent?
Does your wage dictate the amount the bank will lend for the investment loan, or does it just lend you the $330,000 if you indicate that the rent would cover the loan?
Thanks, 
PC
Margaret's answer on the next page. Please click below. 
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Hi PC, 
The bank allows you to borrow up to 80% of the entire value of your property without lender’s mortgage insurance (LMI) applying, or up to 95% (depending upon the lender) of the value with LMI. 
LMI is an insurance policy to protect the bank in the event that you default and a forced sale does not provide enough proceeds to cover your outstanding debt. While it’s a policy for the bank, you pay the premium which, depending on the loan amount and how close to 95% you get, can run to thousands and thousands of dollars.
In your case, your total property is worth $750,000 and so, at 80% of that total value, you can borrow $600,000 all up. As you only owe $420,000, this means that you still have $180,000 of potentially available borrowings. Now remember that this potentially available borrowing is on the existing property – once you find a property to buy and add it to the mix, you can borrow up to 80% against that property, too! So that means that whatever you have left as potential available borrowings on your current home will cover the 20% deposit. 
Given that you have $180,000, technically it’s enough to cover the 20% deposit on $900,000 of additional property. As you will have stamp duties and costs in there too, you can probably expect to easily be able to secure a further $800,000 of property with the current equity you have in your own home, and cover all costs too.
I say ‘potentially available borrowing’ as equity is not the only criteria for borrowing. 
You also need to be able to demonstrate the ability to service a debt. Your income, plus any rent from the property you want to buy, will be considered and a formula used to determine if you can afford to meet your daily living expenses plus the cost of your total borrowings.  
Most lender’s will accept the total amount of PAYG income you earn, self-employed income, as long as you can prove it over two years, and 80% of the actual or projected rent return. Some lenders will consider things like family allowance payments and child support, some investment income and other income – each lender is different.  
In considering your total liabilities, banks will take into account current payments on all loans and credit cards, commitment to child support if any, and the future repayments on the new loan being applied for. Usually, they will add a margin to the new loan repayment just to be sure you can Afford any unforeseen interest rate rises.
Regards,
Margaret
Have a property question? <a href="mailto:askmargaret@propertyobserver.com.au" target="_blank">Ask Margaret!</a>
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How much can I borrow against my home to buy an investment property? Ask Margaret

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Hi Margaret,
I just settled and was having a look at the settlement and saw lender’s mortgage insurance (LMI) was charged as a lump sump straight out.
I would have preferred that LMI payment to be added on to the loan.
Can I change this now and how can I do this in future?
Should I wait next time so I don’t have to pay any LMI?
Kind regards,
B.
Margaret's answer on the next page. Please click below.
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Hi B,
LMI, also known as lender’s mortgage insurance, is a policy which is taken out by the bank, on your behalf, on any loans where the amount of that loan is greater than 80% of the total value of the property you are buying.  
The purpose of LMI is for the protection of the bank – if for some reason you default on your loan and do not repay it, the insurer will pay to the bank any shortfall between the loan balance and the sale price of the property, and then pursue you to get it back.  This might occur if you just stop paying the loan, or if you have a forced property sale and the property sells for less than what you owe to the bank.
The reason it applies to loans of more than 80% of the property’s value is that loans where the owner starts out with little equity are the ones most at risk. Where you borrow less than 80%, there is a greater chance that any forced sale would still recover enough to pay off the debt.
Be aware that although the insurance policy covers the bank (and not you), you pay the premium.  LMI does not cover you for any inability to meet repayments – and so it is not a policy for you, and if you want to cover your mortgage payment in the event of your incapacity to pay, you would need a mortgage repayment protection policy as well.
Where LMI is concerned, you usually have two options – to meet the payment yourself, or add it to the loan. Note that if you add it to your loan, not only will you increase your mortgage repayments (and essentially pay interest on this premium), you reduce the equity you have in the property.  This means you own less of the property, and it would then take you longer to gain the equity you need to leverage into the next property.  It is for this reason that I always advise borrowers who need LMI to meet the payment themselves, if possible.
It’s unlikely that you will now be able to go back and simply add it to the loan without paperwork.  The bank may, however (and depending upon the loan type) go back and reapprove your loan at a higher amount to allow you to  repay yourself for the LMI.  This is known as a loan increase and is possible with many loan types these days.  A loan increase is easier as it does not require a discharge of mortgage to be put in place - it’s just an additional advance of funds.  Note that in doing this you are changing the loan to valuation ratio further (as LMI can be up to 2% of the loan amount) which incurs further LMI again.
Be aware though that if this is an investment loan and you choose to do this, the interest on the amount you ‘draw back’ will not be tax deductible. The tax office will consider this amount to be a payment to you, and therefore of a ‘personal nature’, and so they will not allow deductibility on that portion of your interest.
Regards,
Margaret
Have a property question? <a href="mailto:askmargaret@propertyobserver.com.au" target="_blank">Ask Margaret!</a>
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Do I have to pay LMI as a lump payment?

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Dear Margaret,
I have read some of your Q&amp;A's and decided to email you. I hope that you may be able to give me some advice.
I am going through my divorce settlement with my partner and we have a one bedroom apartment investment house in Melbourne that is currently leased.
I intend to keep the investment house and turn into my principal place of residence after the divorce settlement.
Therefore, I hope you can advise whether this is a good idea and what the pros and cons of changing an investment house  into my principal place of residence?
Looking forward to hear from you soon.
Kind regards,
Thomas
Margaret's answer on the next page. Please click below.
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Dear Thomas,
In Victoria, it is possible to transfer ‘by way of love and affection’ a property from one spouse to another and avoid stamp duty on that transfer.  In a divorce in any state, you can also make the transfer under a divorce settlement and avoid any transfer duty.
However there are a few other issues to consider.  Firstly, and depending upon the value of your spouse’s half at the time, she may incur capital gains tax on her half which is disposed of to you.  This would be assessed on the difference in the value as at time of transfer and the original cost base.  In your case, you would then have two separate cost bases on this property – the half you already owned would have the cost base applicable at the time of purchase and the half you acquire would have one applicable at the time of transfer under the property settlement.
If you live in the property and subsequently sell at a later date, half of the property would incur pro-rated capital gains tax using the cost base on the first half and the eventual sales price, calculated according to days rented, not rented. The second half would be CGT free. 
If at any time you do rent the entire property out, then it’s all complicated further – the half you owned is still pro-rated as above, but the half you acquire may qualify under the six year rule CGT exemption (as long as you do not claim that exemption elsewhere), or not, in which case it has a different method for CGT calculations.
In any event there is no impact on you until you eventually sell, but in the meantime I advise you to keep full and accurate records about everything, even any money you may spend on the property, as these records will be required by the tax office and be crucial for you to correctly establish all of your different cost bases. Apart from this issue, I cannot see anything else you should really worry about, as you are planning to make this your own home and so no further taxes should arise.
Kind regards,
Margaret
Have a property question?  <a href="mailto:askmargaret@propertyobserver.com.au" target="_blank">Ask Margaret!</a>
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What are the pros and cons of moving into an investment property post-divorce?

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Hi Margaret
My father has owned his 150 acre property since the '60s. He subdivided the land into three 50 acre blocks in the '90s, but he still owned all three blocks. He lives on one block and is intending to pass a vacant block into my name so I can build my home on it. All blocks are used for a farming business, however he has no taxable income. He is registered for GST.
There is no way to avoid the capital gains tax (CGT) when he places it in my name is there? 
Do you know roughly how much he will have to pay? The CGT calculators don't make sense to me. Even if I do not pay for the block, it is worth about $800,000. The three blocks were purchased for $60,000 in the 60s so the one would have been $20,000.
Many thanks,
Alan from WA
Margaret's answer on the next page. Please click below.
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Hi Alan,
As you father owned the block in the pre CGT days, this block is still a pre-CGT asset. Subdividing the one pre-CGT asset into three does not changed the pre-CGT status and subdividing does not result in capital gain or capital loss. 
Although your father will make a capital gain when he sells (or passes title of) the block to you, the date he acquired the block is considered to be the date that he acquired the original parcel of land, and the cost base of the original land is divided between the subdivided blocks on a reasonable basis. Therefore there is not CGT for your father to pay at all.
More importantly for you is considering how you will receive this block of land, and in what entity.  If you plan to live there then it may become your principal place of residence, and later if you sell there may be CGT consequences from the date you acquired the land in your name. This is because any part of the land over five acres attracts capital gains tax and cannot use the principal place of residence exemption. 
If you are going to conduct a farm then it could be considered business real property, or the part where the farm is conducted could be. It’s worth considering potentially using a self-managed superannuation structure, as business real property can be transferred into super even if it has initially been given to you.
In any event, my advice is for you to seek quality accounting advice before the transfer takes place. This will allow you to ensure that the right structures are in place from the outset.
Kind regards
Margaret
Have a property question? <a href="mailto:askmargaret@propertyobserver.com.au" target="_blank">Ask Margaret!</a>
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