Queensland builder-developer MAYD has revealed the first look at its major North Kirra beachfront development, lodging amended plans that reduce the number of apartments and increase the proportion of larger residences.

The project is planned across a substantial 4,742 sqm amalgamated site spanning seven lots at <a href="https://www.apartments.com.au/new-apartments/2-6-pacific-parade-bilinga-qld-4225">2-6 Pacific Parade</a> and 27-33 Golden Four Drive in Bilin​ga, directly opposite Nor​th Kirra Beach.

<a href="https://www.apartments.com.au/developers/mayd-group">MAYD</a> secured the site for $32.5 million in 2025, in what was one of the Gold Coast's largest property transactions of the year.

The development will be delivered across two stages, with the first stage carrying an estimated gross realisation value of around $360 million.

The latest amendments seek to reduce the overall apartment count and shift the project further toward the owner-occupier market, with larger residences designed for buyers wanting considerably more space than traditionally offered in a beachfront apartment.

The residential mix will include townhomes, oversized two-bedroom apartments, substantial three-bedroom residences and four-bedroom homes.

MAYD has appointed Cera Stribley to lead the architecture and interiors, with the Melbourne-based design practice drawing on the beachfront setting through a series of ocean-facing terraces and heavily landscaped balconies.

Strong horizontal forms and curved balconies will define the exterior, with subtropical landscaping integrated throughout the building to soften the built form and increase the connection between the residences and the beachfront.

The project will also include an extensive collection of resident wellness and lifestyle facilities, continuing the broader shift across the Gold Coast's luxury apartment market toward larger homes supported by resort-style amenity.

<img alt="MAYD" data-entity-type="file" data-entity-uuid="d1bcbb05-e659-4b47-8bd4-1e595315e2ad" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-27%20at%202.05.03%E2%80%AFPM.png?VersionId=jj0XEud1X1DuLt7_KyElhjMdZGOXmLHP" />

MAYD Founder Todd Mould said North Kirra was increasingly appealing to buyers attracted to the more established, lower-density character of the southern Gold Coast.

"North Kirra presents one of the most compelling luxury residential opportunities currently emerging in Australia, combining absolute beachfront with the character and authenticity that buyers are increasingly seeking, and the same sense of tight-knit community that defined Burleigh and Currumbin perhaps 10 or 15 years ago," Mould said.

"With Gold Coast Airport on its doorstep, it also offers a level of accessibility that broadens its appeal across almost every market demographic."

The project comes as the southern Gold Coast continues to attract an increasing share of high-end apartment development and buyer activity.

Kirra in particular has emerged as one of the region's more tightly held beachfront markets, with its relatively low-density character, established surf and hospitality scene and proximity to Gold Coast Airport differentiating it from the higher-density markets further north.

Mould said those characteristics had informed the approach MAYD and Cera Stribley had taken to the project.

"We've worked closely with Cera Stribley to create a vision that is deeply connected to its surroundings," he said.

"Inspired by the coastline itself, the architecture has been shaped around space, privacy and resort-style living, creating a collection of homes that reflects the next generation of luxury on the southern Gold Coast."

MOTIV Managing Director Carly Cottam, who has been appointed to market the project, said buyer attention had continued to move south along the Gold Coast.

"Purchasers who may once have defaulted to Broadbeach, Main Beach or Surfers Paradise are increasingly recognising the value of a genuine beachfront location that offers lower density, strong amenity and a more established sense of community," Cottam said.

"Kirra has a powerful combination of growing demand and genuine scarcity. Beachfront supply is inherently constrained, the area remains relatively low density, and buyers are increasingly placing a premium on locations that feel established, uncrowded and authentic rather than heavily developed."

Cottam said the proximity to Gold Coast Airport was also proving increasingly important for interstate and second-home buyers.

"Being minutes from Gold Coast Airport makes it particularly compelling for interstate buyers, frequent travellers and second-home purchasers who can access an authentic coastal lifestyle almost immediately after stepping off a flight."

The acquisition takes MAYD's active development portfolio to more than $500 million, with the North Kirra project representing one of its largest undertakings to date.

MAYD is targeting an early 2027 launch.

Joel Robinson

First look at MAYD's North Kirra mixed-use precinct

<main data-perf-region="main">
Castle Hill, the longtime hub of the Hills District, has been one of the major beneficiaries of Sydney's Metro expansion, with improved connectivity helping drive continued population growth, development and buyer demand across the Hills District.

But despite that growth, the suburb has seen relatively few major new apartment projects brought to market over the past 18 months.

Hills District developer Reve Group is looking to fill that gap with <a href="https://www.apartments.com.au/new-apartments/nova-r-ve-castle-hill-2-garthowen-crescent-castle-hill-nsw-2154">Nova Rêve</a>, a major new mixed-use precinct on the corner of Garthowen Crescent and Old Castle Hill Road, a short walk from Castle Hill Metro Station and Castle Towers.

[smartcode_project:default project_id=152737 project_image_fid=377679]

The project will comprise three residential towers alongside a hotel, restaurants, cafes and a skybar, more than 1,600 sqm of ground-floor retail and almost an acre of landscaped gardens.

It represents the largest project undertaken by Reve Group, the development arm of the Kassis family, which has been building across the Hills District for more than 30 years through Kassis Homes.

[smartcode_project:default project_id=152737 project_image_fid=377675]

Nova Rêve also represents a significant step up from the family's first apartment development, Grand Rêve, which was delivered nearby on Garthowen Crescent.

Grand Rêve introduced larger, house-like apartment layouts and premium inclusions including Wolf and Sub-Zero appliances to the Castle Hill market.

Nova Rêve takes that approach to a precinct scale, combining the residential component with hospitality, retail and substantial public and resident landscaping.

[smartcode_project:default project_id=152737 project_image_fid=377685]

Reve Group Managing Director Sam Kassis said the project reflected the family's three decades of building in the Hills, which has evolved from trophy homes on quarter-acre blocks to larger-scale apartment development.

"Grand Rêve was our first apartment project here and it showed us what this pocket of Castle Hill could be. Nova Rêve is the refinement of that idea: not just apartments, but a place the whole suburb can use," Kassis said.

A key part of that approach is the hotel, which has been designed to operate as an amenity for the wider Castle Hill community rather than solely hotel guests.

It will include restaurants, cafes, skybars and all-day dining, alongside conference and event facilities catering to business functions, community groups and private events.

At ground level, more than 1,600 sqm of shops and cafes will open onto the surrounding streets and landscaped areas.

Almost an acre of gardens designed by Land and Form Studios will run through the precinct, incorporating pathways, seating, barbecue areas and children's play spaces.

[smartcode_project:default project_id=152737 project_image_fid=377680]

Reve Group's Romio Georges said creating an active ground plane had been central to the planning of Nova Rêve.

"There are gardens with pathways, barbecues, seating and play areas, shops and cafes opening onto the street, and a hotel with restaurants and a skybar that anyone in Castle Hill can walk into," Georges said.

The project's elevated position on one of Sydney's highest ridgelines will also provide apartments with outlooks toward the Sydney skyline, surrounding parkland and the Blue Mountains.

More than 80 per cent of the apartments will occupy corner positions, with Turner responsible for both the architecture and interiors.

&nbsp;

[smartcode_project_cta:default project_id=152737]

<h3 data-end="3697" data-section-id="q3n5ak" data-start="3672">&nbsp;</h3>
</main>

Nova Rêve arrives as Reve Group bets on Castle Hill's next growth phase

A collection of just 25 large-format apartments and penthouses overlooking Goodwin Park is entering the Coolangatta market, with <a href="https://www.apartments.com.au/new-apartments/marea-residences-coolangatta-27-27a-dixon-street-coolangatta-qld-4225">Maréa Residences</a> combining a low-density, residential-only approach with uninterrupted park and Pacific Ocean outlooks.

Located at 27 Dixon Street, Maréa comprises three and four-bedroom residences alongside a limited number of dual-level penthouses, with the project positioned between Goodwin Park and <a href="https://www.apartments.com.au/developments/coolangatta-qld-4225">Coolangatta</a>’s coastal precinct.

Construction has commenced, with completion currently estimated for late 2027. Three-bedroom residences are priced from $1.8 million.

[smartcode_project:default project_id=150999 project_image_fid=374005]

The project has been designed around its northern outlook across the park, with the building’s architecture, landscaping and material palette intended to establish a connection with the neighbouring green space. The residences have been configured to maximise natural light and views across Goodwin Park towards the ocean.

Inside, the material palette incorporates timber, stone and brushed brass, complemented by curved detailing and ambient lighting. Kitchens and bathrooms carry the same natural material approach, while residences also include basement parking, storage and lift access.

Maréa’s penthouses are arranged over two levels and include private pools, adding another layer to the project’s focus on larger-format apartment living. Across the development, residences are configured with three or four bedrooms rather than the broader mix of smaller apartment types commonly found in larger projects.

[smartcode_project:default project_id=150999 project_image_fid=374010]

Resident amenity is concentrated at rooftop level, where landscaped entertaining terraces and pools take advantage of elevated views across Coolangatta and the Pacific Ocean.

The project has so far been particularly well received by local owner-occupiers and downsizers, according to Urban Activation Property Sales and Marketing Director Matt George, with the residential-only format, construction quality and northern park outlook among the features resonating with purchasers.

“The uninterrupted northern aspect overlooking Goodwin Park has been a key point of difference, with buyers attracted to the sense of serenity and open space the park provides, while still enjoying easy access to the ocean and being within walking distance of the lifestyle and amenities Coolangatta has to offer,” George said.

[smartcode_project:default project_id=150999 project_image_fid=374002]

“The combination of high-quality construction, a residential-only building, park outlook and proximity to the beach has resonated strongly with the local downsizer market.”

The Dixon Street address is within walking distance of Coolangatta Beach and the broader southern Gold Coast coastline, including the surf breaks at Snapper Rocks and Kirra. Coolangatta’s cafés, restaurants and retail are nearby, while Gold Coast Airport is also within close proximity.

[smartcode_project_cta:default project_id=150999]

Maréa Residences brings parkside apartments to Coolangatta

Melbourne developer PDG has secured Victorian Government approval for its $1.5 billion Southbank development <a href="https://www.apartments.com.au/new-apartments/the-one-1-queens-bridge-street-southbank-vic-3006">The One</a>, clearing the way for the long-dormant riverfront site opposite Crown to finally be developed.

The Minister for Planning has approved the project at 1-29 Queens Bridge Street, with the Department of Transport and Planning issuing the planning permit following its assessment.

The approval will allow PDG to develop the prominent 5,059 sqm site with a major mixed-use tower comprising premium apartments, including branded residences, a luxury hotel and boutique office space.

PDG acquired the site in late 2024, with its position directly opposite Crown's main entrance and near Melbourne's Arts Precinct making it one of Southbank's most significant remaining development opportunities.

<img alt="PDG" data-entity-type="file" data-entity-uuid="3933013e-6332-4386-b9be-089df05caf17" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-27%20at%209.29.22%E2%80%AFAM.png?VersionId=sITIgBqDL0N3VNSMwWEmF5UA.uvcsRyu" />

Designed by COX in collaboration with ODO and PDG, the tower's architecture draws on the movement of the Yarra River, with six vertical pleats running the height of the sculpted facade.

The project will also see the heritage-listed Queens Bridge Hotel restored and incorporated into the development&nbsp;with new hospitality and public uses, including a rooftop venue.

A significant component of The One will be its residential amenity.

More than 5,000 sqm of resident facilities will be delivered across a single level, making it one of the largest consolidated residential amenity offerings proposed in an Australian apartment development.

The planning approval also incorporates a major upgrade of Queensbridge Square, which PDG will deliver in partnership with the City of Melbourne.

<img alt="PDG" data-entity-type="file" data-entity-uuid="73167fcd-1031-4b6f-a408-a064cfe45ed1" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-27%20at%209.29.17%E2%80%AFAM.png?VersionId=Pf1AEWxw6SNmBqR0zQW5lyEze.MtxgFp" />

The existing square will be revitalised as a new civic and pedestrian space along the Yarra River, strengthening the connection between the project, Southbank and the riverfront.

PDG Founder and Managing Director Vince Giuliano said the approval represented a major milestone for a site which has remained largely underutilised for more than 15 years.

“This is the most significant Planning Permit approval Melbourne has seen in recent years,” Giuliano said.

“For more than 15 years, this site has remained underutilised. This approval enables us to deliver a project that will contribute meaningfully to the revitalisation of Southbank, restore and reactivate an important heritage building, and create a new civic and hospitality destination for Melbourne.”

The latest approval follows an earlier planning permit issued by the City of Melbourne covering demolition works across part of the site at 9-29 Queens Bridge Street. Those demolition and early works are already underway.

PDG has also started generating early interest in the residential component from owner-occupiers ahead of a planned public launch in early 2027.

PDG secures approval for $1.5bn Southbank apartment development, The One

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.

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.

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.

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.

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.

&nbsp;

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.

Wooloongabba has been popular for apartment developers, particularly since the announcement of the 2032 Summer Olympics games in Brisbane.

While there have been a lot of development applications, it has failed to materialize into real supply.&nbsp;

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>.

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

Foreign Buyers

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GUEST OBSERVATION
The report of the parliamentary committee inquiry into the Foreign Investment Review Board (FIRB) is out.
<a href="https://www.aph.gov.au/Parliamentary_Business/Committees/House/Economics/Foreign_investment_in_real_estate/Tabled_Reports" target="_blank">The inquiry</a> has been conducted with great fanfare to edify the Liberals’ rising star Kelly O’Dwyer.
And what are its findings, once the party-political propaganda is removed?
<ul>
<li>
"A national register of land title transfers that records the citizenship and residency status of all purchases of Australian real estate would fix this and would allow facts to be injected into discussions about foreign investment, rather than ‘best guestimates’. A national register would also help with compliance and enforcement with the foreign investment framework – allowing data to be compared easily."
</li>
</ul>
Ahem, <a href="https://www.psma.com.au/?product=cadlite">we already have a national cadastra (land registry).</a>
It aggregates state land data and has existed since soon after Federation.  104 years ago, the Fisher ALP government believed large swathes of the country were under-utilised and vowed to break up the big estates. Fisher set up the national register within the Australian Tax Office as a pre-condition to imposing a federal land tax with the Land Tax Act 1910 and the Land Tax Assessment Act 1910.
The economics committee recommendation merely overlays citizenship and residency criteria on this existing dataset.  Data-matching departing visa-holders ought give a clear and complete picture of whether owners are in the country and compliant.
<ul>
<li>"The systems failure at FIRB needs to be repaired; and new resources injected into FIRB to ensure better audit, compliance and enforcement outcomes."
</li>
</ul>
Well, quite.  Underresourcing the FIRB began under the Howard government. The Liberals’ free-trade posturing (code for freedom to invest, not the icy blast of real competition on cosy monopolies) leads them to look away when foreign interests buy Australian assets – even where there are national strategic imperatives.  Smearing Rudd and Gillard for their budget errors does not mean Liberal hands are clean.
<ul>
<li>"The ability to sanction people who have breached the foreign investment framework more easily is critical. Hence the need to bring in a civil penalty regime for breaches of the foreign investment framework; along with the need to capture those people, who have previously stood outside the framework but materially impact the integrity of our foreign investment regime. For instance, third parties who knowingly assist foreign investors to breach the rules."
</li>
</ul>
The key word here is ‘sanction’, which likely refers to international law and the trans-national reach of our domestic laws.
Funny, the disputed asset is land, which remains subject to Australian law under all circumstances – it is remarkably difficult to shift offshore.  It could be argued any purchase by a foreigner ought have a covenant added to the title as a warning at sale of the property’s special status. Third-parties playing straw man for ultimate owners are notoriously difficult to expose – good luck bringing a civil case against any but the most obvious examples.
<ul>
<li>"Currently, non-resident foreign investors can profit from the illegal purchase of property. Given this, the current financial penalty that can be applied to a property, regardless of its value, is seen by many as simply the ‘cost of doing business’. Fines and pecuniary penalty orders should directly relate to the value of the property concerned. Furthermore investors who breach the framework should not be able to profit."
</li>
</ul>
Sure.  Just remove the cap on the fine and leave calculation to the judge.
The inquiry recommendations are typical for a conservative government. They are internally coherent, appear to resolve the issue and allow commerce to continue.
They do not address the core of the problem: foreign, absentee owners invest to collect the economic rent accruing to land from the activity of residents. They are not resident, so do not contribute to this activity.
As a parallel, Ireland suffered for centuries from absentee English landowners demanding rents in currency which they spent in London – a constant economic drain that beggared the country.
Why not use that recently-discovered federal land registry to charge them land tax at the state rate for the privilege of capturing the value from our soil and toil?
The maximum State Land Tax rates are: NSW 2.0%, Vic 2.25%, SA 3.7%,  QLD 1.75%, WA 2.67%, TAS 1.5%,  ACT 1.23%.
Prosper did not make a submission to the inquiry, despite our very strong interest in the matter.  We saw it as a witch hunt with a twist to enable the government to brand its critics racist.
Ed Husic for the ALP played the race card and leapt blindly into the Liberals trap, the damn fool. <a href="https://www.macrobusiness.com.au/2014/11/alp-dill-opposes-enforcing-foreign-propery-regime/">Leith van Onselen shreds him here.</a> I can only wish the ALP’s parliamentarians had the vision and statesmanship of Andrew Fisher. We wouldn’t have a land bubble – or this fight over foreign interests.
David Collyer is policy director of <a href="https://www.prosper.org.au/" target="_blank">Prosper Australia</a>.
David ran as a Senate candidate for the Australian Democrats in the 2013 federal election.
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dcollyer-7rQRVBSdz6

The FIRB review failed to address the core problem - foreign absentee investors

<html><body>
<img src="/images/2014/12/02/henry%20dec%202%20one.jpg" width="150" style="float: right;">
Foreign buyers continue to be a talking point for property fanatics in Australia.
Co-CEO of Chinese listing website Juwai, Simon Henry, pictured right, spoke to Property Observer from Hong Kong about some widely held perceptions of foreign buyers and how they really affect the Australian property market.
<ul>
<li>People get quite up in arms about foreign investors pricing first home buyers out of their suburbs. What do you think?</li>
</ul>
The latest Parliamentary report is probably the best indicator. There are a few key things to look at here. One is – is foreign investment good for Australia? Number two – is it pricing the home buyers out of the market? And number three – is the FIRB process actually working?
It found that, firstly, foreign investment is very good for Australia. It adds supply, that actually keeps prices low. If it wasn’t for foreign investors coming into the country prices would probably be higher than what they are. About 9% of the Australian population is employed in the construction industry and it is probably one of the things that has actually helped us be one of the few countries in the OECD to stay out of recession.
In terms of the first home buyers they found that the price point at which the foreign investors are buying is not the same as the first home buyer and that the two segments are almost completely segmented and unaffected by each other.
<ul>
<li>If this is the case, then why do you think we do still have a number of people saying that they are pricing out the first home buyers?</li>
</ul>
The evidence doesn’t suggest that, so I think it’s just misinformation. There’s a lot of media hype around the foreign investors in terms of what they’re doing and what they’re buying and the price point. I think this report shows that they are two very separate markets.
The report also finds that the average property bought by a foreign investor is $900,000 plus, which is well out of the price range of the first home buyer. The report also says that the Chinese shouldn’t be singled out in terms of a foreign buying group because the United States, for instance, are a very close second.
<ul>
<li>What sort of areas are we seeing Chinese buyers purchasing in?</li>
</ul>
We’re definitely seeing them purchasing in the major cities, you’re looking at Melbourne, Sydney, Brisbane and the Gold Coast. Within those areas we're usually looking at the inner city, which is where most of the new builds happen, as the hottest spots.
But then your domestic Chinese audience, those Chinese Australians, typically buy in the high-concentration Chinese areas. In Melbourne that’s Doncaster, Box Hill and in Brisbane it’s Sunnybank Hills, in Sydney it’s Chatswood.
We’re dealing with two groups here. One is the domestic audience and one is an international audience.
<ul>
<li>Do you think in areas where there is established property that there is any illegal property activity occurring?</li>
</ul>
Definitely not. Anyone can buy a property in Australia as long as it has FIRB. If you look at some of the suburbs around, say, Double Bay or Mosman, these are multi-million dollar properties. They are established properties, however it is shown that people who buy these properties have approval to do so.
<ul>
<li>It looks as though it might take a while for public perception to come around to this. What’s your perspective?</li>
</ul>
It’s a shame really as the effect of foreign investment on Australia is so radically good. Instead of looking at foreign investors and saying ‘wow they’re driving up prices’, my view is that we should be saying ‘wow, thank you – you helped us avoid a complete recession in Australia during very hard times.’
<ul>
<li>Looking at your listings portal, Juwai, how many extra activity have you seen over the past 12 to 24 months?</li>
</ul>
We’ve definitely seen a lot of interest shifting towards Australia. It’s the second most popular country [on our portal] and the USA is number one, Canada is number three. So it is currently competing for foreign investment and there are other countries around the world with a lot less restriction [around foreign ownership] – the United States for example has almost no restrictions. It’s really a case of what amount will go to Australia to help fuel the Australian economy.
<ul>
<li>Some investors say that they can’t go overseas and buy a property in China and that it seems a little unequal that they can buy a property here. What do you think?</li>
</ul>
I certainly see where people are coming from. I lived in Thailand for 10 years. However it’s also just a case of demand. If you are a resident in China and worked and lived there for a year then you can buy a property. There’s also 1.4 billion people in China and they don’t require foreign investment in the property sector because they have an aggressive domestic supply.
Australia, on the other hand, has a massive shortage of housing. With population growth expected to be strong we’re looking to build around 400,000 new dwellings over the next couple of years just to handle the immigration supply. We need foreign investment in Australia.
Australia is a lucky country and it does have an immigration policy that brings more people to the country. With record low interest rates it causes people to be able to borrow more money and to buy property of higher value, but the major issue is supply. Whether that’s as a result of government policy, restrictions, the release of land, all those things – if you want to keep prices under control then supply has got to increase.
<ul>
<li>What is the future looking like for foreign investment?</li>
</ul>
We think that the market for foreign investment will continue to grow. We see it as a fantastic opportunity for every country that accepts foreign investment to benefit from it greatly. The only country in the world to have more foreign investment restrictions [than Australia] is Switzerland. Australia’s right up there already with the restrictions placed on foreign investors. Australia has been fortunate enough by its geolocation to Asia and its reputation that it still attracts a good number of foreign investors and this will continue.
It’s driven by the major motivations of Chinese looking at property: Investment, education and immigration.
Australia has a great reputation in terms of education and destination marketing.
See over page for the top 10 Sydney suburbs attracting Chinese buyer interest.
<hr class="system-pagebreak">
Here are Juwai's 10 Sydney suburbs for Chinese buyer interest at present.
<ol>
<li>
<a href="/news">Mosman</a> 
</li>
<li>
<a href="/news">Bondi Beach</a> 
</li>
<li>
<a href="/news">Campbelltown</a> 
</li>
<li>
<a href="/news">Willoughby</a> 
</li>
<li>
<a href="/news">South Coogee</a> 
</li>
<li>
<a href="/news">Castlecrag</a> 
</li>
<li>
<a href="/news">Sydney</a> 
</li>
<li>
<a href="/news">Cremorne</a> 
</li>
<li>
<a href="/news">Bowral</a> 
</li>
<li><a href="/news">Cremorne Point</a></li>
</ol>
Source: Juwai
</body></html>

jduke-EHk3XBmHkn

Foreign investment has pushed prices down, not up: Q&A with Juwai's Simon Henry

<html><body>
The eagerly awaited <a href="https://www.aph.gov.au/~/media/02%20Parliamentary%20Business/24%20Committees/243%20Reps%20Committees/Economics/44p/Real%20Estate/Report/Front.pdf" target="_blank" title="Report on Foreign Investment in Residential Real Estate">report on foreign investment in residential real estate</a> was finally released last week and yes, the House of Representative committee has done a reasonable job with its findings.
Although with closer scrutiny, many questions remain both unclear and without a definitive answer.
The Chair’s forward starts with a predictable warm and fuzzy moment: “Buying into the Australian Dream doesn’t come cheap.” 
Only to proceed to the most amazing faux pas: “There is no simple explanation for the decline in housing affordability – although lack of land supply (a government responsibility), underdevelopment (a government responsibility), state planning laws and regulations (a government responsibility), local council red tape (a government responsibility) and stamp duty and tax arrangements (a government responsibility) likely all play a part.”
 What a fascinating admission that surely warrants another inquiry into these frank admissions.
“According to Foreign Investment Review Board (FIRB) statistics, in the first nine months of this financial year, FIRB approved foreign investment into residential property of around $24.8 billion, 44% higher than the $17.2 billion approved during all of 2012/13. Much of this investment is concentrated in the Melbourne and Sydney markets. Most of the increase is attributable to proposed investment in new property, which at $19.3 billion for the first 9 months of 2013/14 is 79% higher than 2012/13. The total number of established property approvals for the first 9 months of 2013/14 is 5,755 compared to 5,101 for 2012/13.”
Then the clanger: “First, there is no accurate or timely data that tracks foreign investment in residential real estate. No-one really knows how much foreign investment there is in residential real estate, nor where the investment comes from.” 
That being the case then how can the House Economics Committee find that foreign investment is not causing distortions in the Australian housing sector – when by their own admission they concede they have no idea how much real estate has been sold to foreign buyers?
Then of course: “During the course of the inquiry, it came to light that no court action has been taken by FIRB since 2006. During the entire Rudd-Gillard-Rudd government, not one divestment order was issued, which means that not one government sale of illegally acquired property was made. This compares with 17 divestment orders between 2003 to 2007 when foreign investment in residential real estate was at much lower levels.”
They quite conveniently failed to mention that for some strange reason the Rudd government abolished FIRB approvals to foreign investment during the course of the global financial crisis. At the time it was most unclear as to what was exactly happening as decisions based on FIRB appeared at best chaotic. How can you then prosecute when the Rudd government made this totally legal?
Of course the bull in the china shop (no pun intended) is those many loopholes that exist to overseas buyers in that it is very easy for a family member who resides overseas to simply transfer monies into an Australian bank account. The family member here goes out and buys a property in their name and when the overseas family member gains Australian residency they simply pay the stamp duty to transfer the property into their own name.
Alternatively, attaining Australian residency can take a few years so it is much easier to take up New Zealand residency – an almost immediate process. New Zealanders are permitted to buy all forms of Australian real estate so it is very easy to beat the system. It is just a shame that the Senate Inquiry missed many of the existing trap doors that remain open in the Australian property industry today.
Of course it is just a mere coincidence that the Chinese government requested a bipartisan arrangement with the Australian government to process the identities of all Chinese buyers who purchase Australian real estate. Cue the establishment of a national register of land title which still requires approval from the states and territories – who are yet to be consulted on this measure.
Then of course the recently announced Free Trade Agreement with China allows any Chinese national full access to acquire any commercial or agricultural property up to $1 billion. 
I’m really struggling to get my head around this.
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robertsimeon-hRNTwJyXkQ

Foreign buyers inquiry leaves many questions unanswered

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Reactions to the federal Parliament’s report into foreign investment in real estate have been mixed with some welcoming its recommendations and others claiming it has missed an opportunity to improve housing affordability.
The report by the House of Representatives Standing Committee on Economics <a href="/news/no-surprises-in-kelly-odwyers-12-firb-report-recommendations">made 12 recommendations</a> centred on better enforcing existing regulations, increasing the penalties for non-compliance and improving access to data on foreign investment.
The Property Council of Australia, the Housing Industry Association and The Urban Development Institute of Australia agreed the recommendations would support housing activity in Australia, boosting the economy and adding to the supply of homes.
“We welcome foreign investment in residential real estate as it provides up to 35% of a new development,” Nick Proud, executive director of the Residential Development Council at the PCA said.
HIA chief executive, industry policy and media Graham Wolfe said foreign investment through pre-sales in multi-unit developments could be crucial to ensuring projects came to market.
“[This] obviously benefits potential domestic buyers as well as renters, through more choice and competition,” he said.
But buyers’ agent Patrick Bright, director of EPS Property Search, said he was disappointed that stronger action had not been taken to curb foreign investment which he said was putting upward pressure on property prices.
“To be frank I am shocked that the government is going to continue to put the desires of wealthy foreigners ahead of its own citizens and ahead of the best long-term interests of the country. The government is also clearly putting the interests of developers ahead of every day Australians,” he said.
Bright’s concerns echo views put forward in private submissions to the inquiry. For example, Jennifer Jaeger said in a submission: “I do not believe that continued overseas investment in Australian residential real estate provides ongoing benefits to Australian residents who are finding themselves “priced out” of purchase and rental booms.”
A submission from First National Real Estate noted that property prices in suburbs that attracted Asian investors had risen more quickly than prices in neighbouring areas that were less attractive to foreign buyers. It gave the examples of Carlingford compared with North Rocks, Coogee versus Randwick and Marrickville compared with Arncliffe/Rockdale in Sydney.
Under existing legislation, foreign nationals can only buy newly constructed dwellings and are prohibited from buying established homes. Temporary residents can buy one established dwelling as their residence but they must sell within three months of leaving the country.
However, the report noted some foreign buyers may be breaking the rules. It was highly critical of the Foreign Investment Review Board’s collection of data and enforcement of existing regulations, saying there had been a “significant failure of leadership at FIRB”. It recommended a number of changes to strengthen enforcement and toughen penalties for non-compliance.
UDIA National President Cameron Shephard said foreign investors that weren’t complying with the rules gave a bad name to those that did the right thing.
“Any changes to the administration of the rules, such as the introduction of an application fee, will have to be very carefully considered, so that they do not unnecessarily deter law abiding investors,” he said.
Nyko Property estate agent Bill Nikolouzakis said the $1,500 fee that was recommended by the report, and estimated to generate revenue of $158.7 million over four years, would be too small to deter foreign buyers and could be put towards better resourcing the FIRB.
“This would continue to allow us to attract foreign investors … while giving FIRB the resources to ensure they are identifying and penalising foreign investors who contravene the law,” Nikolouzakis said.
“Putting a process in place to help identify the foreign investors doing the wrong thing and the individuals helping them is the key. Further, the penalty must be enough of a deterrent to make an effect. If no one is being caught or the deterrent is not sufficient, it will not have the desired outcome,” he said.
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zfielding-GvX3Uq9KTa

Mixed reactions to federal foreign buyer inquiry recommendations

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As was widely anticipated, the Federal Parliamentary committee into affordable housing and foreign investment has recommended lawyers, real estate agents and mortgage brokers who knowingly help offshore property buyers break foreign investment rules should face stiff new penalties.
It is among the 12 recommendations of a long-awaited parliamentary inquiry by the House Economics Committee that found foreign investment is not causing market distortions in the housing sector:
<ul>
<li>Recommendation 1</li>
</ul>
The Committee recommends that the current foreign investment framework applying to foreign purchases of residential real estate be retained in its current form, utilising the existing legislated prohibitions and restrictions on purchases of established dwellings, and encouraging foreign investment to increase Australia's supply of new housing.
<ul>
<li>Recommendation 2</li>
</ul>
The Committee recommends that the Foreign Investment Review Board and the Foreign Investment and Trade Policy Division of Treasury put in place appropriate processes for the purpose of audit, compliance and enforcement of the foreign investment framework. Such processes must accurately capture audit, compliance and enforcement data for the purpose of oversight of the Foreign Investment Review Board and the Treasury.
<ul>
<li>Recommendation 3</li>
</ul>
The Committee recommends that the Government apply a modest administrative fee to the current screening for all foreign purchases of residential real estate, including purchases by temporary residents.
Fees collected should be hypothecated to the Treasury's Foreign Investment and Trade Policy Division for the purpose of funding audit, compliance and enforcement activities.
<ul>
<li>Recommendation 4</li>
</ul>
The Committee recommends that the Government introduce a civil penalty regime for breaches of the foreign investment framework as it applies to residential real estate, with the following features:
n pecuniary penalty orders imposed under this penalty regime to be calculated as a percentage of the property value to act as an effective deterrent; and
n the regime to apply to foreign investors and any third party who knowingly assists a foreign investor to breach the framework.
Pecuniary penalty orders collected should be hypothecated to the Treasury's Foreign Investment and Trade Policy Division for the purpose of funding audit, compliance and enforcement activities.
<ul>
<li>Recommendation 5</li>
</ul>
The Committee recommends that the Government amend the Foreign Acquisitions and Takeovers Act 1975 to provide that the criminal penalties for breaching the foreign investment framework as it applies to residential real estate, apply equally to any third party who knowingly assists a foreign investor in residential real estate to breach the foreign investment framework.
<ul>
<li>Recommendation 6</li>
</ul>
The Committee recommends that in any instance where a foreign owner divests an illegally held established property, any capital gain from the sale of that property be retained by the Government.
Funds collected by this measure should be hypothecated to the Treasury's Foreign Investment and Trade Policy Division for the purpose of funding audit, compliance and enforcement activities.
<ul>
<li>Recommendation 7</li>
</ul>
The Committee recommends that Australia's Foreign Investment Policy be amended to explicitly require a temporary resident to divest an established property within three months if it ceases to be their primary residence.
<ul>
<li>Recommendation 8</li>
</ul>
The Committee recommends that the Government, in conjunction with the States and Territories, establish a national register of land title transfers that records the citizenship and residency status of all purchasers of Australian real estate. This information should be accessible by relevant agencies from a single database.
<ul>
<li>Recommendation 9</li>
</ul>
The Committee recommends that the Government establish an alert system for the expiry of temporary visas that can be used by the Treasury to issue property divestment orders in cases of non-compliance:
- By amending the Migration Act 1958 so that the Department of Immigration and Border Protection must inform FIRB when a temporary resident departs Australia upon expiry of their visa; and
- By establishing effective and timely internal processes at the Treasury to receive and cross-check this information against its property databases to screen for compliance with the foreign investment framework.
<ul>
<li>Recommendation 10</li>
</ul>
The Committee recommends that the Government amend the Foreign Acquisitions and Takeovers Act 1975 to provide that residential property sold under off-the-plan certificates that is marketed for sale overseas, must be marketed in Australia for the same period of time. Breaches of this requirement should be subject to sanctions under the Act ranging from fines to the cancellation of a sale.
<ul>
<li>Recommendation 11</li>
</ul>
In light of the expected finalisation of the statutory review of the Anti- Money Laundering and Counter-Terrorism Financing Act 2006 in early 2015, the Committee recommends that the Government consider the purchase of residential property by foreign investors as a possible area of investigation when considering amendments to the legislation.
<ul>
<li>Recommendation 12</li>
</ul>
The Committee recommends that Treasury's Foreign Investment and Trade Policy Division make greater use of the databases held by AUSTRAC, and also of other relevant Federal and State Government databases, to assist the Foreign Investment Review Board in its duties and responsibilities. 
The report of Kelly O'Dwyer's committee over six public hearings, and after considering more than 92 submissions, centred around four key findings.
First, there is no accurate or timely data that tracks foreign investment in residential real estate. No-one really knows how much foreign investment there is in residential real estate, nor where that investment comes from.
<ul>
<li>A national register of land title transfers that records the citizenship and residency status of all purchases of Australian real estate would fix this and would allow facts to be injected into discussions about foreign investment, rather than ‘best guestimates’. A national register would also help with compliance and enforcement with the foreign investment framework – allowing data to be compared easily.</li>
<li>Other relevant government information should also be captured and made available to FIRB. At present, FIRB cannot access data from the Department of Immigration and Border Protection on departing visa holders. Given the government has this information, this makes no sense.</li>
<li>Together, these initiatives would allow authorities to track departing visa holders who may have purchased an existing home but who, under current rules, need to sell that home within three months of leaving.</li>
</ul>
Second, there has been a significant failure of leadership at FIRB, which was unable to provide basic compliance information to the committee about its investigations and enforcement activity.
<ul>
<li>During the course of the inquiry, it came to light that no court action has been taken by FIRB since 2006. During the entire Rudd-Gillard-Rudd Government, not one divestment order was issued, which means not one government sale of illegally acquired property was made. This compares with 17 divestment orders between 2003 to 2007 when foreign investment in residential real estate was at much lower levels. FIRB was also unable to provide basic data on voluntary divestments.</li>
<li>It defies belief that there has been universal compliance with the foreign investment framework outlined above since 2007.</li>
<li>The systems failure at FIRB needs to be repaired; and new resources injected into FIRB to ensure better audit, compliance and enforcement outcomes.</li>
</ul>
Third, if you are not prepared to enforce the rules, then it is less likely that people will comply with the rules. This is especially true if the consequences of a breach are not meaningfully adverse.
<ul>
<li>The ability to sanction people who have breached the foreign investment framework more easily is critical. Hence the need to bring in a civil penalty regime for breaches of the foreign investment framework; along with the need to capture those people, who have previously stood outside the framework but materially impact the integrity of our foreign investment regime. For instance, third parties who knowingly assist foreign investors to breach the rules.</li>
<li>Currently, non-resident foreign investors can profit from the illegal purchase of property. Given this, the current financial penalty that can be applied to a property, regardless of its value, is seen by many as simply the ‘cost of doing business’. Fines and pecuniary penalty orders should directly relate to the value of the property concerned. Furthermore investors who breach the framework should not be able to profit.</li>
</ul>
Fourth, currently the Australian taxpayer foots the bill for the administration of FIRB and FITPD, not the foreign investors applying for approval. This has arguably contributed to underinvestment in FIRB’s audit, compliance and enforcement activities.
<ul>
<li>Just as other regulators adopt a user pays model, the committee recognises that a modest administration fee can be implemented to fund enhanced audit, compliance and enforcement capacity within FIRB, as well as other new measures outlined in the recommendations.</li>
<li>Parliamentary Budget Office analysis suggests that a modest application fee of $1,500 would generate revenue of $158.7 million over 4 years2, yet amount to 0.27% or 0.20% of the purchase price for an average home in Melbourne and Sydney respectively.</li>
</ul>
Source: <a href="https://www.aph.gov.au/Parliamentary_Business/Committees/House/Economics/Foreign_investment_in_real_estate/Tabled_Reports" target="_blank">Federal Parliamentary committee into affordable housing and foreign investment</a>
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jchancellor-FAypfDUnLy

No surprises in Kelly O'Dwyer's 12 FIRB report recommendations

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A petition on Change.org to toughen regulations on foreign investment in Australia has reached 30,000 signatures.
Just over a month ago <a href="/news/petition-to-toughen-firb-regulations-at-almost-6-000-signatures">signatures hit 6,000</a> and since then it has continued to gain popularity, putting further pressure on the Foreign Investment Review Board (FIRB) to tighten their rules.
With supporting information from Today Tonight and The Australian, Simon Hosking, <a href="https://www.change.org/p/the-executive-members-toughen-the-regulations-for-foreign-investment-in-australia" target="_blank">the man who launched the petition</a>, noted that he is unable to purchase property in China, Japan and many emerging economies, yet foreign buyers are able to purchase in Australia.
“Foreigners are laughing at us. Australians and our companies are not able to buy any property in China, as an example. Why foreigners should then be allowed to flout our flimsy FIRB rules in an almost unregulated way, threatening the viability of local buyers by forcing up prices,” Hosking said.
The petition, which will be sent to the executive members of the FIRB, asks for the introduction of more thorough testing of foreign buyers and their purchases, closer scrutiny of each purchase for irregularities and the toughening of regulations surrounding foreign investment in Australian properties.
Hosking says that the issue has been largely ignored by politicians, but noted that media interest and rising house prices have increased pressure on MPs to make a change. 
Comments from those that had signed the petition expressed major concerns.
“I would not just be concerned about these illegal purchases in the cities. Foreign ownership of our arable farming land is increasing at an alarming rate also. Our food source is in danger of being controlled by foreign interests. Only limited and controlled foreign investment is good for Australia,” says Lorraine Apap.
“Only let Australian citizen purchase properties in Australia otherwise our children will never be able to purchase their own home,” writes Marilyn Hansen.
“If it’s impossible to buy property as a foreigner in China or Japan...or any other country, then it should also be the case for that would be foreign buyer. I say that the corruption going on within the real estate industry is an outrage. In china you would be shot for this... on the other hand, the people doing the shooting are probably doing the buying,” says Murray King.
To counter these issues a $1,500 foreign investor fee has been proposed by the Abbott government, leaving local investors even more unhappy.
“This is cruel joke on all Australian families," said Hosking.
"My research indicates clearly, foreign investors are paying sometimes $100, 000 to $400,000 above the reserve price. So a $1,500 application fee is hardly going to stop them from buying; is it?
"Hong Kong foreign investors pay 15% stamp duty. This type of impost implemented here, would provide a valuable revenue source and create a level playing field.
"At the moment foreign investors are getting a free ride and a free entry; at the locals' expense.”
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owisniewski-RiYLqnXfKH

Online petition to toughen foreign investor rules hits 30,000 signatures

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Foreign property ­buyers in Australia will not be slugged extra stamp duty, as modelling by the Parliamentary Budget Office has concluded the charge would be self-defeating.
But the federal government is being asked to consider a $1,500 application fee to process their purchasing paperwork.
Kelly O'Dwyer's parliamentary committee has concluded the prospect of additional stamp duties would likely kill off the market for foreign buyers.
The stamp duty issue will not be formally recommended by the parliamentary committee into housing affordability and foreign ownership when it publishes its long-awaited report on Thursday, the Australian Financial Review has reported.
The review is expected to recommend the establishment of a single database of property purchases across states and territories and linking that information to customs data.
The Treasurer Joe Hockey recently said the federal government was prepared to go it alone after resistance from state bureaucracies.
The $1,500 application fee would raise $600 million over the first decade, News Ltd papers reported.
The funds would help track compliance for unauthorised acquisitions.
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A $1,500 application fee, but no higher property stamp duty for foreign buyers

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Earlier in the year we were contacted by a rep from a group of overseas investors from Asia with a punchy nine-figure sum to invest in Australian commercial real estate, seeking an office property investment in the harbour city.
Upon meeting at our office, we tactfully pointed out that, even as visible from our very office window, Sydney is busily in the process of constructing an impressive oversupply of office space. With some of the biggest developments in Australian history well underway (the <a href="https://petewargent.blogspot.co.uk/2013/11/cranewatch-barangaroo-emerges-as" target="_blank">LendLease Barangaroo "T1" tower</a> will be Australia's largest ever commercial tower, for example) better office investments must surely exist in other cities well away from Sydney's oversupplied Central Business District (CBD).  
There will be far more Sydney office space than demand for it, and rents must inevitably fall, yet the message conveyed back to us was that Chinese investors are familiar with and like Sydney, and therefore they be would progressing to seek out a Sydney office investment anyway. Dollar Declines When I wrote my first book back in 2011, the Aussie dollar was trading way above parity. I put forward the viewpoint that as and when the dollar declined materially we would see an inflow of foreign capital to Australia, although the impacts could be somewhat different to what we might expect and may be felt most acutely in the respective CBDs of Sydney and Melbourne and the immediate fringes thereof.
With commodity prices now getting whacked across the board, finally it does not seem unreasonable to expect that we might see an Aussie dollar with a "70 handle" some time in the not-too-distant future, which would provide some welcome respite for our exporting economy.
<img src="https://2.bp.blogspot.com/-TS4jgN0zDaM/VG3yvZRixoI/AAAAAAAARWo/GreEQf5jhKE/s1600/CHINA1.jpg">
Australia and China have this week signed a <a href="https://petewargent.blogspot.co.uk/2014/11/china-completes-trifecta-of-free-trade" target="_blank">Free Trade Agreement</a>, and so with China news and views all the rage at this time, let's take a look at three macro trends which we might expect to see that could impact investors in Australia. <img src="/images/2014/07/04/yellow-one.jpg" alt="" style="float: left;"> Land Prices
As <a href="https://petewargent.blogspot.co.uk/2014/11/china-completes-trifecta-of-free-trade" target="_blank">noted here earlier in the week</a>, under the terms of the ChAFTA, the threshold of Foreign Investment Review Board (FIRB) screening for Chinese investors wishing to buy commercial real estate has been lifted from a comparatively trifling $54 million to a massive $1,078 million, in line with limits on private business investments.
Meaning? To all intents and purposes, Chinese investment groups wanting to mop up Australian commercial property can target anything they want.
In theory this could ultimately add to the housing supply in Australia as prime location commercial sites are acquired and residential developments are instead brought to the market. In reality what is happening is that Chinese investors are paying <a href="https://www.canberratimes.com.au/business/property/the-chinese-buyers-property-developers-dont-want-20141120-11q915" target="_blank">way above market price</a> to gain access to prime sites in our two largest cities, and then are proceeding to landbank them.
As also noted by <a href="https://www.businessspectator.com.au/article/2014/11/12/property/great-australian-land-grab" target="_blank">Business Spectator</a>, almost exactly mirroring my own anecdote above, this is only really happening in inner Sydney and inner Melbourne ("mainly around the CBD and their fringes"), where Chinese investors pay "at least 25% more" for sought after areas pushing development site prices "35 to 40% higher".
It's something we can see first hand in Sydney's inner west where I personally have long owned investment properties, including in Erskineville where former warehouses and printing shops are seen as ripe for new development, sending land prices are soaring. Back to <a href="https://www.businessspectator.com.au/article/2014/11/12/property/great-australian-land-grab" target="_blank">Business Spectator</a>:
"Goodman sold an industrial park in Erskinville [sic] in South Sydney [technically it's in the inner west region], a large potential residential site, for $350 million to Hong Kong’s Golden Horse Holdings -- reportedly the highest price yet paid for a residential site in Australia. 
"Mr Williams believes that those entering the market at the current point in the price cycle will have to build the higher land cost into the price of the end product."
When folk see diggers and cranes they instinctively associate the machinery with an oversupply of dwellings, but while there is plenty of construction happening, vacancy rates in Erskineville have been under 1% (effectively nil for any half-way decent property) for the past decade, while across the inner west region the vacancy rate is closer to the city's average at 1.%.
It is important not to underestimate the potentially limitless scale of Chinese investment. Take the example of Greenland, constructors of the 600 unit <a href="https://www.greenlandcentre.com.au/team/" target="_blank">Greenland Centre</a> tower in Sydney's CBD, a behemoth group which has generated an astonishing $78 billion in revenue in the last 12 months. To put that in perspective even the mighty Commonwealth Bank could only muster $44,312 million. Reports the <a href="https://www.afr.com/p/special_reports/opportunityasia/china_greenland_to_make_fta_agriculture_kkcz4WZyJYMhSVIwF3WgRJ" target="_blank">AFR</a>:
"Chinese state-owned property developer Greenland sees “no ceiling” on the amount of funds it is prepared to invest here, declaring it will expand into agriculture, a day after the free trade agreement with China was signed."
The merits of foreign investment in development sites are forever mixed, and land prices around the centre of Sydney and Melbourne are undoubtedly now being pushed higher by Chinese investment. As the investor group suggested to me, however, Chinese developer interest in most other parts of Australia is considerably lower, and probably immaterial in the majority of cases.
<img src="/images/2014/07/04/yellow-two.jpg" alt="" style="float: left;">Share Price Indices
China's construction boom has already distorted Australian share indices, although a good deal of the impact is now to be seen in the rear view mirror. The huge explosion in Australian mining investment was threatening to make a nonsense of my contention that industrials and financials make for a better long term play than Australia's resources companies.
However, as our updated chart packs will confirm next Thursday, mining and engineering construction is now set to drop like a stone over the years ahead, and the resources index is at long last following commodity prices down to earth with a thud as supply ramps up.
<img src="https://3.bp.blogspot.com/-JtigSL_0v9c/VG3ywRLTk9I/AAAAAAAARW4/YvlA640soGg/s1600/SPI.gif">
Industrials and financials as an index tend to be more self-sustaining and can pay stronger dividends through the cycle than the resources explorers and producers which exhaust their reserves and incur heavy reinvestment costs in the form of exploration and construction spend. Remember too that yield and income are not the same thing (aka. beware the "yield trap") and thus the listed property trusts (today known as "A-REITs") which have often paid the highest yields may be better suited to those in the income phase of their lives such as retirees, with high payout ratios stunting growth. The best long-term bet for both growth and dividend income has generally been a diversified share portfolio weighted to industrials and financials and by next month's chart pack we may see that the financials index has finally eclipsed the resources index (which since 1999 in particular has been performing way stronger than long-term history suggests is normal). It is feasible that lower interest rates and a lower dollar could make share indices more attractive to foreign investors, who already own a sizeable chunk of Australian shareholdings, but forecasting monthly index movements is essentially a fool's errand, so I'll pass on that for today.
This article continues on the next page. Please click below.
<hr class="system-pagebreak">
<img src="/images/2014/07/04/yellow-three.jpg" alt="" style="float: left;"> Residential Property One way or another Chinese investors will inevitably have an impact on Australian residential property. Consider the inexorable rise in the number of Chinese visitors to our shores.
<img src="https://4.bp.blogspot.com/-GgqASg4ms5k/VG3yvpimevI/AAAAAAAARWs/UsTaBDexz-o/s1600/China2.jpg">
And, indeed, Chinese permanent settlers. 
<img src="https://3.bp.blogspot.com/-gkF7OoZdAA4/VG3yv7BRNhI/AAAAAAAARWw/SPGQqZca3_o/s1600/China3.jpg"> 
Funds might flow into Australian residential property either legally or illegally as is debated ad infinitum. My contention has always been that inner Sydney, inner Melbourne, and to some extent inner Brisbane, will be the locations impacted by the trend towards the globalisation of capital city property markets. <a href="https://www.afr.com/p/business/property/the_top_suburbs_for_asian_investors_5zZJDau39TShWuaJzSAS1J" target="_blank">Reports the AFR</a>, offshore interest from Chinese buyers is very heavily focussed on a few inner Sydney, Melbourne and Brisbane areas, with $1.35 million the average price bracket of interest and average purchase budgets ranging from $3.36 million to $3.7 million. Unsurprisingly the most popular suburbs include Mosman and Bondi Beach, prime location Sydney suburbs with access to beaches, as well as other locations in the eastern suburbs and lower north shore from Coogee to Cremorne. Melbourne and Brisbane suburbs also feature prominently.
The "blue chip versus blue sky" suburb debate was discussed <a href="https://propertyupdate.com.au/blue-chip-versus-blue-sky/" target="_blank">over at Property Update</a> earlier this week. As an investor in Bondi myself, I always tend towards the blue chip choices. While it's not everyone's cup of tea, we have seen median apartment price growth in Bondi Beach of 45% in the past five years or $231,000, while median unit prices in Bondi Junction, where I'm an investor (generally, I like train lines), are up by 50.4% or $234,000. Granted this is not the fastest rate of growth in Sydney. As previously cited, another example I'm familiar with as an investor is the inner west suburb of Erskineville, where we've seen median unit prices rise by 56.7% in the past five years, or $243,000. Quality investments have done better than median price growth. Whatever your view on Bondi, and there are no doubt a fair few detractors, I'll take a bet that there are plenty of investors around Australia who would chew your arm off for results of $250,000 plus in capital growth over the last five years. Beware the Yield Trap in Real Estate It may seem counter-intuitive that prime location suburbs are the long-term outperformers, since there is ever a tendency to feel that the best of the growth must always lie in the past. However, in common with all commodities, it is demand outstripping supply that moves prices as capital city real estate becomes a more global product. We have seen this play in London over the decades, with house prices in Kensington &amp; Chelsea <a href="https://allenwargent.com/wp-content/uploads/2013/04/AW-LONDON-BE-SP13-031.pdf" target="_blank">easily outperforming</a> all other property types in Britain, and continuing to do so throughout the financial crisis and beyond. Despite a thousand crash predictions over the years, the average asking price today is <a href="https://petewargent.blogspot.co.uk/2014/11/london-prices-surge-past-600000" target="_blank">more than £2.2 million</a>...and we are talking an entire London borough here, not only Egerton Crescent. Buying cheap property in outer areas (where there is more land available for release) because prices seemingly "can't get cheaper" can often be a more risky approach. My bookshelves at home are strewn with UK "Buy-to-Let Bibles" written a decade ago before the financial crisis, many of which stressed the importance of seeking 8% yields since capital growth was apparently impossible to predict. Yet the high-yielding 8 percenter suburbs listed therein now read like a retrospective list of where to find property which has crashed in value, from the north-east of England to the Potteries. Yield in itself is rarely a reliable indicator of the quality of an investment, and higher yield can often represent higher risk. With Australian household debt nudging up against its likely effective ceiling from around 2006 onwards, one wonders whether the chat forums will begin to be filled with yield-focused property investors from around Australia who are beginning to question whether property is even a worthwhile investment at all as the current property cycle eventually reaches its peak. Capital growth has been very weak and even negative for years in many areas, since spiralling household debt can no longer lift all boats as it once did.
<img src="https://www.rba.gov.au/chart-pack/images/5-6-household-sector/6tl-hhfin-small.gif?accessed=2014-11-20-17-15-04" alt="Household Finances graph">
If income was your goal then for the past five years, you need have looked no further than Australian <a href="https://petewargent.blogspot.co.uk/2014/11/monthly-macro-housing-market-update" target="_blank">bank stocks</a>. Investing in residential property predominantly for its yield is akin to attending an AC/DC concert in order to appreciate Phil Rudd's drumming prowess. It's important - integral to the overall result even - but it's not the main event. Capital growth is.
You can visit <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) or Pete's <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blog</a>.
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>' .
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Chinese funds seeking a home: The three macro trends that could impact Australian investors

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Shimao Property, controlled by billionaire Hui Wing Mau, has bought 175 Liverpool Street in Sydney’s CBD.
<a href="https://rca.joneslanglasalle.com.au/property-offices-nsw-sydney-501232079" target="_blank">It sold through JLL</a> for around $390 million by the Singapore’s GIC Real Estate that paid $230 million in 2005.
The newly refurbished A-Grade office building totalling 48,890 square metres of NLA is occupied by Telstra, state and federal government tenants.
GIC, the sovereign wealth fund of Singapore, owns about $4 billion worth of real estate in Australia, including Sydney's Chifley Tower and Queen Victoria Building.
The Chinese-born Hui Wing Mau is a BRW Rich Lister and was ranked by Forbes as China’s 12th richest person, worth around $6.35 billion.
He is a member of the Chinese People’s Political Consultative Conference. 
Shimao Holdings, which is listed on the Hong Kong stock exchange, holds 112 developing projects in 42 cities.  
Its holdings include hotel projects such as the $548 million InterContinental Shimao Hotel in Shanghai.
Following the completion of InterContinental Shimao Shanghai Wonderland (Groundscraper Hotel) in Shanghai, a hotel situated at the lowest altitude in the world, Shimao Property announced its “Hotel on the Cliff” project in Jiangyin. 
The group generates its turnover primarily from property development, property investment and hotel operations.
As at 30 June 2014, turnover of the group reached RMB 23.68 billion (A$4.4 billion), grew by 42.0% when compared to RMB 16.68 billion (A$3,14 billion) for the corresponding period in 2013.
During the period, revenue from property sales amounted to RMB 22.61 billion, accounting for 95.5% of the total revenue and representing an increase of 44.1% over the corresponding period in 2013.
The average recognised selling price increased by 4.2% to RMB 11,518 (A$2,166) per square metre in the first half of 2014, from RMB 11,059 (A$2,080) per square metre for the corresponding period in 2013. 
Notwithstanding the Chinese residential market remains sluggish in the first half of the year, the group posted contracted sales of RMB 8.07 (A$1.51 billion) billion in June, which was a record high for monthly sales since the inception of Shimao Property.
It was also the fourth month in which the group had registered consecutive sales growth, after it had posted monthly sales of more than RMB 6 billion (A$1.13) from March to May inclusive. 
Building on its strategic positioning, established in 2013, as a “Pioneer in Urban Evolution” and a “Lifestyle Service Provider”, Shimao Property launched branding campaigns across the country this year.  
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Singaporeans sell Hyde Park, Sydney office to Hui Wing Mau's Shimao Property

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The federal government's desire for a national register of all property purchases by foreign investors, in co-ordination with the states, now appears temporarily out of reach.
"I've virtually given up on that ….now I am going to have to set up our own register," Treasurer Joe Hockey told <a href="https://www.2gb.com/audioplayer/73911#.VGKvNVZK4zU" target="_blank">2GB breakfast broadcaster Alan Jones today</a> (@ 8.30 mins).
Queensland is the only state that maintains a register of all foreign land owners, both urban and agriculture.
Meanwhile the federal government is set to tighten its scrutiny of foreign purchases of Australian agricultural land, according to a Daily Telegraph report by Scott Rochfort.
Federal Agriculture Minister Barnaby Joyce told <a href="https://www.news.com.au/national/nsw-act/tough-new-rules-as-foreigners-gouge-huge-chunk-of-australia/story-fnii5s3x-1227120001045" target="_blank">The Daily Telegraph</a> the new rules, which will lower the threshold of farm purchases examined by the Foreign ­Investment Review Board (FIRB) from $248 million to $15 million, were “imminent”.
“We are entitled to have a proper oversight and in some instances a concern if people believe things are becoming excessive,’’ Joyce said. Any entities owned by a foreign government will have a $1 FIRB threshold.
Since the 1970s, the Foreign Investment Review Board has been required to supervise the purchase of residential and agricultural real estate by foreign buyers, with notification to the FIRB mandatory.
Acquisitions by state owned enterprises or sovereign wealth funds must also be reported to the FIRB for review. 
However the then federal coalition said in opposition the lack of robust data and the absence of foreign land ownership registers had stirred concerns about the extent of foreign land ownership that may (or may not) be occurring throughout Australia.
In response to pressure over the lack of information, the Labor government in November 2010 directed the Australian Bureau of Statistics (ABS) to include questions concerning ownership of agricultural land in a farm survey.
However, the validity and usefulness of the official ABS data has been widely questioned.
The coalition had a policy implementing a database capable of tracking acquisitions of land across Australia to inform public debate or policy. 
In late 2012 the Labor government announced plans to introduce a foreign ownership register for agricultural land, with Prime Minister Julia Gillard saying she wanted to take the politics out of foreign ownership.
Gillard told the National Farmers Federation national congress that the register would provide a more comprehensive picture of the specific size and locations of foreign agricultural land holdings.
The debate has flared in the suburbs regarding urban land given the belief of high rates of Chinese property acquisitions over the past two years.
Kelly O'Dwyer, the Liberal member for Higgins and the Chair of the House of Representatives Standing Committee on Economics, has been charged with finding the solution having said there are a number of buyers who are not going to the Foreign Investment Review Board for screening.
"We need to have better data, better information, which is another reason why one of the key recommendations that our committee will be making is to have a national register where, at the transfer of land, you actually understand who is purchasing that residential property and that that data can be matched against all sorts of other data, including data from the Immigration Department, where you have, for instance, temporary residents who might've left the country and who, under our current existing foreign investment framework, need to sell their property within three months of leaving - some of those people are not doing that and the data isn't being matched, which means those people, at the moment, are not being caught," she told the ABC Lateline program in late September.
It was expected the move to electronic conveyancing would expedite the process.
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