<p><a href="https://www.apartments.com.au/developments/collingwood-vic-3066">Collingwood</a>’s northern edge continues to sharpen its reputation as one of Melbourne’s most compelling cultural precincts, where established creative institutions, leading hospitality, and independent fashion converge within a tightly held inner-city neighbourhood.</p>

<p>Set within this evolving pocket, <a href="https://www.apartments.com.au/new-apartments/derby-street-by-milieu-collingwood-4-derby-street-collingwood-vic-3066">Derby Street by Milieu</a> draws on a location that balances proximity to some of the inner north’s most influential destinations with the quieter, tree-lined character that defines the streets edging East Melbourne. Positioned just moments from both Smith and Gertrude Streets, the address sits on the periphery of Collingwood’s cultural core, offering immediate access without the intensity of its busiest frontages.&nbsp;</p>

<p>[smartcode_project:default project_id=145576 project_image_fid=355945]</p>

<p>Gertrude Street, in particular, anchors the area’s identity as a destination for Melbourne’s leading food, art and fashion. Within a short walk, venues such as Marion, Cutler &amp; Co, IDES and the Builders Arms Hotel define a tightly curated dining scene with enduring citywide appeal, complemented by a strong fashion and retail presence including Havn, Le Labo and a selection of independent boutiques.</p>

<p>Nearby, institutions such as the Australian Print Workshop and Collingwood Yards sustain a constant rhythm of exhibitions, performances and creative output, embedding art and culture into the everyday fabric of the neighbourhood.</p>

<p>Smith Street, running parallel, extends this offering with a broader mix of hospitality and nightlife, maintaining its status as one of Melbourne’s most active inner-urban strips.</p>

<p>Beyond these high-energy streets, the immediate surrounds shift in tone. Derby Street and its neighbouring blocks are defined by low-rise heritage terraces, mature trees and a settled residential character. Fitzroy Gardens and Carlton Gardens are both within walking distance, alongside the Royal Exhibition Building and Melbourne Museum, bringing together green space and cultural landmarks within minutes of home.</p>

<p>[smartcode_project:default project_id=145576 project_image_fid=355985]</p>

<p>Connectivity remains a key advantage. The CBD sits within easy reach, accessible by tram along Smith Street in around 20 minutes, while also remaining close enough to walk or cycle, supported by the inner north’s established bike network.&nbsp;</p>

<p><a href="https://www.apartments.com.au/developers/milieu-property">Milieu</a>’s long-standing connection to Collingwood underpins the project’s approach. With a portfolio that includes multiple nearby developments across Bedford, Peel and Napier Streets, the developer brings a sustained understanding of the area’s character and evolution. Derby Street continues this trajectory as a collaboration with award-winning Melbourne-based <a href="https://www.apartments.com.au/architects/studio-bright">Studio Bright</a>, marking the practice’s first multi-residential project in the inner north and reflecting a shared focus on design integrity and contextual response.&nbsp;</p>

<p>Balancing connection to the neighbourhood with a sense of seclusion and refuge, Derby Street by Milieu embodies a level of care and craft typically reserved for single residential projects. Comprising 22 residences across six storeys, with two to four-bedroom configurations priced from $1.15 million, the project is currently under construction with completion expected in late 2027.&nbsp;</p>

<p>[smartcode_project_cta:default project_id=145576]</p>


Joel Robinson

Derby Street by Milieu, at the top end of Collingwood

<p data-end="308" data-start="101">A rare new apartment development in the Blue Mountains is the latest in a string of State Significant Development Applications submitted through the New South Wales Government's Housing Delivery Authority.</p>

<p data-end="563" data-start="310">A total of 270 apartments are being proposed for the 1.16-hectare site at <a href="https://www.apartments.com.au/new-apartments/blue-mountains-alpine-retreat-142-150-narrow-neck-road-katoomba-nsw-2780">142–150 Narrow Neck Road in Katoomba</a>, a parcel of land adjoining the former Katoomba Golf Course. The site was acquired for $3.85 million in 2021 by private developer VDM Prime.</p>

<p data-end="783" data-start="565">The apartments, comprising a mix of serviced apartments, affordable housing, and traditional build-to-sell product, will be spread across eight low-rise buildings, along with a separate building for a new restaurant, arranged around a green spine that leads to a central park.</p>

<p><img alt="Katoomba" data-entity-type="file" data-entity-uuid="ee9a2072-f465-44f1-9076-80c9c8ecca02" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-04-22%20at%209.20.21%E2%80%AFAM.png?VersionId=4bT0vQ7j_syl65wcrJmHGm3m5pTvwrY_" /></p>

<p data-end="980" data-start="785">The Urban Design Report by Atlas Urban says the vision is to create a "contemporary mountain precinct that is responsive to its escarpment landscape, heritage character, and community context."</p>

<p data-end="1226" data-start="982">"The development responds to the current housing supply and affordability challenges identified under the NSW Housing Delivery Authority (HDA), providing a balanced mix of standard, affordable, and short-stay accommodation," the report noted.</p>

<p data-end="1472" data-start="1228">"By introducing a variety of dwelling types and tenures, the proposal supports intergenerational living, local workforce retention, and greater housing choice within an area constrained by topography, heritage, and environmental protections."</p>

<p data-end="1668" data-start="1474">Of the 270 units proposed, 52 will be serviced apartments. The remainder will comprise 54 studios, 121 one-bedroom units, 39 two-bedroom apartments, and four three- to four-bedroom residences.</p>

<p data-end="1668" data-start="1474"><img alt="Katoomba" data-entity-type="file" data-entity-uuid="f704508d-1bdf-4170-955d-0256652402a7" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-04-22%20at%209.56.49%E2%80%AFAM.png?VersionId=TzarHMO4gTOsblCqsbJQkvMqWj9nu2Au" /></p>

<p data-end="1932" data-start="1670">The Design Report, by VDM Prime and appointed architect Antoniades Architects, noted that the design seeks to "provide a built form outcome that is highly considered, respectful and contextually fitting, whilst contributing positively to an evolving precinct."</p>

<p data-end="2162" data-start="1934">"The site offers three frontages and the opportunity to provide a meaningful interface with the public domain environment. the design has a sympathetic response to streetscape and the green open space that surrounds the site."</p>

<p data-end="2721" data-start="2164">The report states that the buildings are broken up to establish an appropriate bulk and scale, emphasised through height and setback strategies and defined through articulation that supports the transition of precinct granularity. It also notes that a central communal open space is established through the site to enhance the social dynamic and access to amenity, including natural ventilation and light to the apartments. The east and west frontages receive solar access during the morning and afternoon, whilst maximising views to the green open space.</p>

<p data-end="2883" data-start="2723">The site adjoins the recently completed Yarrabee Katoomba development, comprising 24 duplexes that were completed last year and sold through McGrath Projects.</p>

<p data-end="2883" data-start="2723">The relatively new Housing Delivery Authority pathway established by the NSW Government allows developers to submit State Significant Development Applications through a fast-tracked state process, effectively reducing reliance on local council approval pathways and aiming to accelerate housing delivery across New South Wales.</p>


First look: Nearly 300 apartments pitched on former Katoomba golf course site

<p>In Melbourne’s established inner east, the qualities that define a traditional house, width, height, and access to open ground, are increasingly difficult to replicate in new residential developments. Larger landholdings are scarce, and with them, the ability to create apartments that extend beyond compact, internalised layouts.&nbsp;</p>

<p>In <a href="https://www.apartments.com.au/developments/kew-vic-3101">Kew</a>, where the residential fabric is shaped by generous setbacks and mature tree canopies, that tension is especially visible.</p>

<p><a href="https://www.apartments.com.au/developers/ricdanic-investments-pty-ltd">Ricdanic</a>&nbsp;is bringing forward a boutique collection of just 13 residences across two buildings at 9–11 Wimba Avenue, Kew. Comprising six homes at No.9 and seven at No.11, the project sits on a quiet, tree-lined street just off Cotham Road.&nbsp;</p>

<p>Each apartment has been planned with a level of independence more commonly associated with standalone dwellings, balancing privacy with the efficiencies of apartment living.</p>

<p>Architect Chris Idle, who has been practising for over two decades, says projects like this don’t come along often.</p>

<p>“There are very few opportunities to do these kinds of developments in leafy, established suburbs,” he explains. “To get this level of amenity, natural light, and architectural freedom in such a setting is extremely rare.”</p>

<p>[smartcode_project:default project_id=140755 project_image_fid=366267]</p>

<p>The internal planning begins with width. Living areas extend beyond five metres, allowing furniture, circulation, and glazing to sit comfortably within the same zone without compression. Ceiling heights shift from three metres through to five metres in select areas, changing the sense of scale as you move through the apartment. These proportions are paired with double-glazed windows and fully electric systems, balancing volume with performance, supported by a 7.2 NatHERS energy rating.&nbsp;</p>

<p>From the main living space, the apartments open directly outward. Large sliding doors connect to private gardens averaging 125 square metres, with some residences also incorporating balconies of around 60 square metres. Rather than acting as secondary outdoor zones, these areas sit flush with the internal floor level, extending the usable footprint of the home and allowing for multiple modes of use, whether for quiet daily routines or larger gatherings.&nbsp;</p>

<p>The landscape, led by <a href="https://www.apartments.com.au/landscape-architect/john-patrick-landscape-architects">John Patrick</a>, reinforces this relationship. Across the site, 23 different plant species have been introduced, including a mix of native and established varieties, arranged to maintain privacy while preserving sightlines and light access. Gardens are not treated as decorative buffers but as functional extensions of the apartments, shaped to accommodate movement, seating, and informal use over time.&nbsp;</p>

<p>[smartcode_project:default project_id=140755 project_image_fid=366265]</p>

<p>Architecturally, the project draws from Kew’s historic residential language. Handmade bricks by Krause define the exterior, grounding the buildings within the material palette of the suburb, while interior finishes, stone, timber flooring, and restrained detailing, continue this approach internally. Architect Chris Idle describes the intent as long-term rather than stylistic: “We wanted it to feel timeless.”&nbsp;</p>

<p>This emphasis on durability extends to how the buildings are accessed and secured. Entry is managed through keyless systems, with a double-gated basement incorporating number plate recognition for vehicle access. Each residence is paired with a private lock-up garage accommodating two to three cars, alongside storage, while all entry points are monitored continuously. These measures sit alongside EV readiness and fully electric infrastructure, aligning the project’s operational systems with its long-term design outlook.&nbsp;</p>

<p>The setting remains central to how the development is experienced. Located within walking distance of Kew Junction and close to established schools including Carey Grammar and Xavier College, the address benefits from existing infrastructure while maintaining a residential quietness that is increasingly difficult to find at this scale.&nbsp;</p>

<p>Construction is being delivered by <a href="https://www.apartments.com.au/builders/sinjen">Sinjen</a>, with a 10-year structural guarantee, with completion targeted for mid-2027.</p>

<p>[smartcode_project_cta:default project_id=140755]</p>


Inside Wimba Ave, Kew’s garden-scale residences designed for space and permanence

<p>High-end Sydney developer&nbsp;<a href="https://www.apartments.com.au/developers/abadeen-group">Abadeen</a> has secured approval for one of its latest Mosman projects, one of the first developments approved by Mosman Council under the NSW Government’s Low and Mid-Rise Housing Policy.</p>

<p>The approval represents an important step in delivering well-considered housing next to established village locations on Sydney’s Lower North Shore, in line with the intent of the Low and Mid-Rise zoning framework.<br />
&nbsp;<br />
There are currently 13 other sites lodged within Mosman Council under the policy, with <a href="https://www.apartments.com.au/new-apartments/27-29-heydon-street-mosman-nsw-2088">Heydon Street</a> among the first to receive development consent.<br />
&nbsp;<br />
Abadeen Founder and Executive Chairman Justin Brown said the project reflects a considered and appropriate response to its planning context.<br />
&nbsp;<br />
“This approval demonstrates how carefully considered, design-led development can align with the objectives of the Low and Mid-Rise Housing Policy," Brown said.</p>

<p>"The scheme has been designed to respond sensitively to its village setting, with a built form, scale and level of amenity appropriate to its local context. The determination reflects a balanced and considered planning outcome, with Council recognising the capacity for this site to accommodate additional housing within a well-located and established precinct.”</p>

<p><img alt="Abadeen secures first approval under low and mid-rise housing policy for Heydon Street, Mosman" data-entity-type="file" data-entity-uuid="92811ce3-02e8-44fc-996e-c61ae039bd3e" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Heydon%20Street%20Aerial.jpg?VersionId=ZHJVuWQT64QcdrFJx963pFWFzTX7lI2I" /></p>

<p>The Heydon Street approval followed extensive consultation with Mosman Council, with Abadeen working closely with Council throughout the assessment process.</p>

<p>The approved scheme comprises 27 residences, with only four per floor, creating a low-density living environment. The building will include four half-floor penthouses designed to capture views across Middle Harbour, Sydney Harbour and the surrounding district.&nbsp;</p>

<p>The project is expected to appeal to downsizers and owner-occupiers seeking house-like proportions, privacy and local convenience. There will be north-facing Middle Harbour views from the second level upward. It is also just a flat 100-metre walk to Bridgepoint Shopping Centre, which will appeal to owner-occupiers and in particular downsizers.</p>

<p>Two-bedroom residences are expected to be priced from $1.99 million when sales launch later this year.<br />
&nbsp;<br />
Joe Tack, CEO at Abadeen, said the outcome reflects both the quality of the site and the broader need for well-located housing.<br />
&nbsp;<br />
“This is a highly considered site within a highly established local setting, offering elevated views and strong connectivity. The project has been designed to respond to that context, delivering a scale and quality of housing aligned with both the planning framework and evolving market demand.”<br />
&nbsp;<br />
“This approval is particularly significant in the context of Mosman, where new housing supply has historically been limited. While it represents the first approval of this scale in Mosman to be achieved in over 50 years, it is importantly located within a well-established residential location, in close proximity to the established commercial amenity of Spit Road and Mosman Village. It reflects strong confidence in Abadeen’s approach to design, delivery and community integration, while contributing to the delivery of much-needed housing in a highly constrained market.”</p>

<p>Abadeen has an established track record across Sydney’s Lower North Shore, with recent completions including KOYO in Crows Nest and ENSO in Neutral Bay.</p>

<p>In Mosman, Abadeen recently completed The Hampden, with Mosman Residences on the corner of Spit Road and Clifford Street scheduled for completion later this year. Construction has also commenced at Burran Residences, comprising three full-floor ultra-premium homes positioned just 50 metres from Balmoral Beach, with residences expected to achieve prices in excess of $20 million. Two further projects are also progressing through planning within the local government area.</p>


Abadeen secures first approval under low and mid-rise housing policy for Heydon Street, Mosman apartment development

<p data-end="294" data-start="93">Apartment developer <a href="https://www.apartments.com.au/developers/martello">Martello™</a> is one of the latest entrants to the Gold Coast development market, with its debut project set to be one of the most boutique offerings on Chevron Island in recent years.</p>

<p data-end="461" data-start="296">Martello has unveiled <a href="https://www.apartments.com.au/new-apartments/aere-chevron-island-18-20-mawarra-street-chevron-island-qld-4217">Aere Chevron Island</a>, a collection of 33 large-scale two-, three-, and four-bedroom apartments across an 18-storey building on Mawarra Street.</p>

<p data-end="461" data-start="296">[smartcode_project:default project_id=143932 project_image_fid=367517]</p>

<p data-end="695" data-start="463">The developer has placed a strong emphasis on wellness, briefing architecture firm Raunik Design to embed this philosophy into the project. It is a direction <a href="https://www.apartments.com.au/developers/martello">Martello™</a> plans to carry through its future developments along the coast.</p>

<p data-end="1094" data-start="697"><a href="https://www.apartments.com.au/developers/martello">Martello™</a> has positioned Aere as a continuation of its human-centric development approach, with a focus extending beyond amenity to the fundamentals of layout, natural light, and spatial planning. Promax Construction has already been appointed to deliver the project, with construction expected to commence in the coming months as part of the group’s broader expansion into South East Queensland.</p>

<p data-end="1443" data-start="1096">Rising above the low-rise fabric of Chevron Island, Aere’s design emphasises generous internal proportions and uninterrupted outlooks, with residences oriented to capture coastal, skyline, and waterway views. Interiors prioritise open-plan living, with large-format glazing and carefully considered transitions between indoor and outdoor spaces.</p>

<p data-end="1443" data-start="1096">[smartcode_project:default project_id=143932 project_image_fid=367508]</p>

<p data-end="1788" data-start="1445">The upper levels are dedicated to larger-format homes, including four-bedroom residences designed as half-floor offerings. These layouts prioritise separation between living and sleeping zones, along with increased privacy and storage, features more commonly associated with detached housing than traditional apartment product.</p>

<p data-end="2059" data-start="1790">Aere’s private resident amenity spaces centre on wellness. A rooftop level will incorporate a heated swimming pool, sauna and spa, alongside a residents’ lounge, dining areas and barbecue spaces, while additional shared facilities throughout the building include a gym and yoga area.</p>

<p data-end="2335" data-start="2061">The inclusion of both social and quieter retreat spaces reflects a broader shift in higher-end apartment design on the Gold Coast, where developers are increasingly responding to owner-occupier demand for buildings that support long-term living rather than short-stay use.</p>

<p data-end="2335" data-start="2061">[smartcode_project:default project_id=143932 project_image_fid=367814]</p>

<p data-end="2560" data-start="2337">Aere is positioned within walking distance of Chevron Island’s village centre along Thomas Drive, as well as the HOTA cultural precinct via the Green Bridge, connecting residents to parklands, galleries, and event spaces.</p>

<p data-end="2762" data-start="2562">For <a href="https://www.apartments.com.au/developers/martello">Martello™</a>, Aere represents the first in a series of planned Gold Coast developments, with the group also exploring opportunities in other coastal precincts, including Kirra and Palm Beach.</p>

<p data-end="3111" data-start="2764">The move north comes as sustained population growth and infrastructure investment continue to reshape South East Queensland, with developers increasingly targeting boutique, design-led projects in established lifestyle pockets. Aere’s relatively small scale and emphasis on spatial quality position it within this emerging segment of the market.</p>

<p>[smartcode_project_cta:default project_id=143932]</p>


Martello™ enters Gold Coast market with wellness-led Chevron Island development Aere

Investment Returns

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<h1 class="title"> </h1>
<p><span>The Australian Bureau of Statistics (ABS) released housing finance data for September 2015 earlier this week.</span></p>
<p><a href="/images/2015/11/12/Screen%20Shot%202015-11-12%20at%2010.10.17%20AM.png" target="_blank"><span>Click to enlarge</span></a></p>
<p><span><img src="/images/2015/11/12/Screen%20Shot%202015-11-12%20at%2010.10.17%20AM.png" alt="" width="623" height="488"></span></p>
<p> </p>
<p><span>The broad housing finance trends show that demand from the owner occupier segment of lending is falling while demand from investors fades.  Of course since late December last year we have seen limits come into effect regarding annual investment credit growth as well as, more recently, higher interest rates for all investment borrowers and lower loan to value ratios for many.  </span></p>
<p><span>Given these changes it is no real surprise that demand from this market segment is falling; there is less investment borrowing to be had and lower LVRs mean that for many borrowers negative gearing becomes somewhat less attractive. On the other hand, demand from owner occupiers is rising, largely from upgraders and those refinancing while there is little sign that first home buyer demand is rising. </span></p>
<p><span>Much of the recent refinance activity has subsequently translated into eventual housing investment, it will be interesting to see if the current refinance activity is just home owners shopping around for a better mortgage deal or if it will start to flow to investment in other asset classes.</span></p>
<p><a href="/images/2015/11/12/Chart-2.jpg" target="_blank"><span>Click to enlarge</span></a></p>
<p><span><img src="/images/2015/11/12/Chart-2.jpg" alt=""></span></p>
<p> </p>
<p><span>Looking more closely at owner occupier lending, the seasonally adjusted data shows that there was $21.0 billion worth of commitments in September 2015.  This represented a monthly increase of 3.0% and a year-on-year rise of 23.1%. The $21.0 billion consisted of $1.8 billion in lending for construction of dwellings, $1.3 billion in lending for purchase of new dwellings, $6.7 billion in lending for refinances and $11.2 billion in lending for purchase of established dwellings. </span></p>
<p><span>Each of the four components of owner occupier housing finance commitments have increased over the month with most having increased year-on-year.  Year-on-year, the changes have been recorded at -1.3% for lending for construction of dwellings, +32.1% for lending for purchase of new dwellings, +30.0% for refinances and +23.0% for purchases of established dwellings. </span></p>
<p><span>Clearly owner occupier demand is rising however, the ABS does note that ADIs are currently making changes to lending classifications which are seeing more investor loans classified as loans to owner occupiers. This will be contributing to a proportion of this rise, how big that proportion is we are unsure.</span></p>
<p><a href="/images/2015/11/12/Chart-3.jpg" target="_blank"><span>Click to enlarge</span></a></p>
<p><span><img src="/images/2015/11/12/Chart-3.jpg" alt=""></span></p>
<p> </p>
<p><span>In September 2015 there was a seasonally adjusted $12.3 billion worth of housing finance commitments to investors, this was the lowest value of investor lending since August 2014.  The monthly value of lending to investors has fallen by -12.8% from its peak of $14.1 billion in April 2015.  The $12.3 billion figure consists of $0.6 billion in lending for new construction which is the lowest level in a year and $11.7 billion in lending for established homes which is the lowest level since August of last year.  Lending for new construction tends to be volatile however, it has fallen by -42.2% from its recent peak of $1.1 billion worth of commitments in December 2014.  The less volatile investment lending for established homes has fallen by -11.0% from its peak of $13.1 billion in April 2015.  Again, recent reclassifications of lending by ADIs will be contributing to some of the recent weakness however, a changing investment lending landscape is undoubtedly the most significant contributor.</span></p>
<p><span>The latest housing credit data shows that the annual rate of investor credit growth still remains above 10% (10.4%) so it is reasonable to expect that investor housing finance commitments will continue to fall over the coming months. With the rate of value growth slowing, higher interest rates and lower LVRs for many investors, the attractiveness of purchasing an investment property is also easing. </span></p>
<p><span>While investment lending has been cooling down, owner occupier lending has been rising however, much of the rise is due to upgraders and refinances.  We anticipate that this trend is likely to continue although probably not rising by the same magnitude as we’ve seen over recent months. Furthermore we anticipate that less of the refinance activity is going to flow back into housing in the form of investment purchasing.</span></p>
<p><span> </span></p>
<p><em>Cameron Kusher is research analyst for CoreLogic RP Data. You can contact him <a href="https://blog.corelogic.com.au/author/cameron-kusher/" target="_blank">here</a>.</em></p>
<p><span> </span></p>
<h1 class="title"> </h1>
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ckusher-ujnxiKuFQs

Investor housing demand continues to fall sharply: Cameron Kusher

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<p>SMSF retirees need to save more to achieve their retirement goals due to a weaker investment outlook that indicates returns will remain lower for longer, according to new research.</p>
<p>According to a scenario from the report titled SMSFs Treading Water, a 65-year-old SMSF couple to afford a comfortable retirement (as defined by ASFA1) has increased by 17% from $702,000 to $824,000. </p>
<p>However, 66% of SMSF trustees can remain confident (with an 80% probability) that they are well placed to live comfortably in retirement on $60,063 a year, according to the report by the SMSF Association and SMSF retirement experts Accurium.</p>
<p>At a higher spending level of $70,000 a year, 50% can be confident of achieving this goal, while 39% can be very confident of doing so. </p>
<p>The median desired spending level in retirement for an SMSF couple is $78,800, up from $75,000 a year earlier, says the report. However, 24% of SMSF couples aim to spend over $100,000 a year in retirement. </p>
<p>At an aspirational level of $100,000 a year spending, 28% can be confident and just 20% very confident. </p>
<p>Another key finding is that the median balance for a two-member SMSF at retirement rose to $1.137 million for the 2016 financial year compared with $1.124 million for the previous year. SMSF median balances at retirement have risen 17% since 2010. </p>
<p>Contrary to the widely-held belief that bequests are central to SMSF retirement plans, only 7% of SMSF households have specific inheritance plans. </p>
<p>More than half of SMSF retirees cannot be reasonably confident (80% probability) of achieving their desired lifestyle in retirement, although about 25% can be very confident (95% probability).</p>
<p>One in four are unlikely (less than 50% chance) to achieve their goals.</p>
<p>SMSF Association head of Technical Peter Hogan said the report highlights that most SMSF trustees are still on track to meet their retirement goals, despite a difficult investment environment and low interest rates. </p>
<p>“But for trustees and their specialist advisors, these are challenging times, especially on the investment front. From our perspective, this is why it’s critical superannuation has a sustained period of stability free from significant changes to give trustees greater confidence in the system.” </p>
<p>Accurium’s general manager, Douglas McBirnie, said the Reserve Bank had said in July that the neutral nominal cash rate, a key indicator, was now 3.5% rather than 5% previously, indicating an increased probability of a ‘lower for longer’ situation — interest rates and equity returns remaining low.</p>
<p>“The upshot for the average SMSF household approaching retirement is that their improving balance has not been able to keep up with the increased cost of meeting their desired lifestyle in retirement,” said McBirnie. <br>  <br> “Even so, SMSF households are still better placed than most sectors of the community to meet their financial goals in retirement.”</p>
<p>The SMSF Association and Accurium study is the first report to provide detailed figures on how the retirement wealth of Australia’s SMSFs has changed post the 2016 SMSF annual tax returns. </p>
<p>The report draws from Accurium’s database and looks at how SMSFs have fared in the 2016 financial year and considers how well prepared trustees are for retirement.</p>
<p>The research shows that although SMSFs are generally well prepared for retirement, lower expected investment returns means that trustees need to review their retirement plans to ensure they have enough capital to support their retirement goals.</p>
<p>It takes a probability-based approach which factors in more than 2,000 investment scenarios to show the capital levels required for trustees to retire with confidence of achieving the retirement lifestyle they want. </p>
<p>Statistical analysis is drawn from a database of over 65,000 SMSFs (approximately 130,000 SMSF trustees) which precedes the Australian Taxation Office’s Statistical Overview for 2016, which is likely to become available in late 2017. </p>
<p>Accurium’s dataset represents SMSF households who are phasing into retirement.</p>
<p> </p>
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jonathanchancellor-7SQnKwU6yx

Lower investment returns to stretch SMSF investment goals, says study

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<p>EXPERT OBSERVER</p>
<p>The past five years have seen pretty good returns for well-diversified investors.</p>
<p>While cash and bond returns have been modest, growth assets have been strong.</p>
<p>Average balance growth superannuation funds have returned 8.5% pa over the five years to June and that’s after fees and taxes.</p>
<p>This is particularly impressive given that inflation has been around 2%.</p>
<p><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2018/8/28/RETURN%201.jpg" alt=""> </p>
<p> <br>Shares have climbed a wall of worry in recent years with a revolving door list of worries around Europe, deflation, inflation, rate hikes, Trump, North Korea, China, trade, house prices, etc. And unlisted commercial property and infrastructure have benefitted from an ongoing search for yield. But can it continue over the next five years? This note looks at the main issues.</p>
<p><strong>Declining medium-term return potential</strong></p>
<p>While investment returns have been good, the medium-term (say 5-10 year) potential from major asset classes has been moving down.</p>
<p>Investment returns have two components: yield (or income flow) and capital growth.</p>
<p>Looking at both of these components points to lower average investment returns over the next five years compared to the last five years.</p>
<p>First, it’s well known that investment yields are not what they used to be. Back in the early 1980s the medium-term return potential from investing was pretty solid for the simple reason that interest rates, bond yields, dividend yields and rental yields were so high.</p>
<p>The RBA's "cash rate" was around 14%, 3-year bank term deposit rates were around 12%, 10-year bond yields were around 13.5%, property yields were running around 8-9% and dividend yields on shares were around 6.5% in Australia and 5% globally.</p>
<p>Such yields meant that investments were already providing very high income and only modest capital growth was necessary for growth assets to generate good returns.</p>
<p>As it turns out, most assets had spectacular returns in the 1980s and 1990s and balanced growth superannuation fund returns averaged 14.1% in nominal terms and 9.4% in real terms between 1982 and 1999 (after taxes and fees).</p>
<p><br>Since the early 1980s, investment yields have mostly fallen and this has continued over the last five years. See the next chart.<br> <img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2018/8/28/RETURN%202.jpg" alt=""></p>
<p>Today the cash rate is 1.5%, 3-year bank term deposit rates are 2.5%, 10-year bond yields are 2.5%, gross residential property yields are around 3%, commercial property yields are just above 5%, dividend yields are still around 5.3% for Australian shares (with franking credits) but they are around 2.4% for global shares. This on its own points to a lower return potential.</p>
<p>Second, the capital growth potential from growth assets is likely to be constrained relatively to the past reflecting more constrained nominal economic growth. Several megatrends are likely to impact growth over the medium term.</p>
<p>These include:</p>
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<div class="column">Continued slower growth in household debt.</div>
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<br>An ongoing backlash against the economic rationalist policies of globalisation, deregulation and small government, thanks in large part to weak wages growth and rising inequality resulting in populist, less market friendly policies – such as trade protectionism and rising regulation.</div>
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<br>Rising geopolitical tensions – most notably as the US attempts to constrain the rising power of China.</div>
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<br>Aging and slowing populations – resulting in slowing labour force growth and rising pressure on public sector budgets.</div>
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<br>Constrained commodity prices – as the surge in resource investment last decade boosts supply.</div>
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<br>Technological innovation and automation.</div>
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<div class="column">Continuing rapid growth in Asia and China’s middle class.</div>
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<div class="column">Rising environmental awareness and pressure to slow the human contribution to global warming.</div>
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<div class="column">The energy revolution resulting in a shift to sustainable energy as its relative cost continues to collapse.</div>
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<div class="column">Most of these will constrain economic growth &amp; hence investment returns, with declining population growth the most significant.</div>
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<div class="column"><strong>Medium-term return projections</strong></div>
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<div class="column">Our approach to get a handle on medium-term return potential is to start with current yields for each asset class and apply simple and consistent assumptions regarding capital growth reflecting the above-mentioned megatrends. We also prefer to avoid forecasting and like to keep the analysis simple.</div>
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<br>For bonds, the best predictor of future medium-term returns is current bond yields. If a 5-year bond is held for five years its initial yield will be its return. We use 5-year bond yields.</div>
<div class="column"> </div>
<div class="column">For equities, a model of current dividend yields plus trend nominal GDP growth (a proxy for capital growth) does a good job of predicting medium-term returns. This approach avoids getting too complicated.1</div>
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<div class="column">For property, we use current rental yields and likely trend inflation as a proxy for rental and capital growth.</div>
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<div class="column">For unlisted infrastructure, we use current average yields and capital growth just ahead of inflation.</div>
<div class="column"> </div>
<div class="column">In the case of cash, the current yield is of no value in assessing its medium-term return. So we assume a medium term average that allows for higher than normal bank rates relative to the cash rate and high household debt.</div>
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<div class="column">Our latest return projections are shown in the next table.</div>
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<br><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2018/8/28/RETURN%203.jpg" alt="">
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<br>The second column shows each asset’s current income yield, the third shows their 5-10 year growth potential, and the final column their total return potential. </div>
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<br>We assume inflation averages around or just below central bank targets.</div>
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<br>For Australia we have adopted a relatively conservative growth assumption reflecting constrained commodity prices and slower productivity growth.</div>
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<br>We allow for forward points in the return projections for global assets based around current market pricing – which adds 0.6% to the return from world equities.</div>
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<br>Combining the returns indicates the implied return for a diversified growth mix of assets has fallen to 6.2% pa.</div>
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<br><strong>Key observations</strong>
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<br>Several things are worth noting from these projections.</div>
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<br>The medium-term return potential using this approach has continued to fall due largely to the rally in most assets which has pushed investment yields lower.</div>
<div class="column"> </div>
<div class="column">Projected returns using this approach for a diversified growth mix of assets has fallen from 10.3% pa at the low point of the GFC in March 2009 to 6.2% now. Five years ago it was nearly 8%.<br><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2018/8/28/RETURN%204.jpg" alt=""><br>Government bonds offer low returns due to ultra-low yields.<br>Unlisted commercial property and infrastructure continue to come out relatively well, reflecting their higher yields.</div>
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<br>Australian shares stack up well on the basis of yield, but it’s still hard to beat Asian/emerging shares for growth potential.</div>
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<br>The downside risks to our medium-term return projections are that: the world is plunged into another recession driving another major bear market in shares or that investment yields are pushed up to more normal levels as inflation rebounds causing large capital losses. Just allow that drawdowns in returns tend to be infrequent but concentrated and it’s been a while since the last big one – see next chart.</div>
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<br>The upside risks are (always) less obvious but could occur if we see improving global growth but inflation remaining low.<br><strong><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2018/8/28/RETURN%205.jpg" alt=""></strong>
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<strong>Implications for investors</strong><br>First, have reasonable return expectations. Low yields &amp; constrained GDP growth indicate it’s not reasonable to expect sustained double-digit returns.</div>
<div class="column"> </div>
<div class="column">In fact, the decline in the rolling 10-year average of super fund returns indicates we have been in a lower-return world for many years – it’s just that it only becomes clear every so often with bear markets with strong returns in between. See the last chart.</div>
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<br>Second, much of this reflects very low inflation - real returns haven’t fallen as much.</div>
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<br>Finally, focus on assets with decent sustainable income flow as they provide confidence regarding future returns.</div>
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<br><em>Dr Shane Oliver</em><br><em>Head of Investment Strategy and Chief Economist AMP Capital</em>
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soliver-smf6LQXgW9

Investment returns over the next five years are likely to slow: Shane Oliver

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<p>Amid the concerns around investing in property and shares, super funds as an asset class have in general delivered double-digit returns, according to two research groups.</p>
<p>Super funds delivered an average 10.7 per cent return for the year to June 30, 2017, marking the eighth consecutive year of positive growth, according to research group Chant West.</p>
<p>Even among the super funds, industry funds performed best, returning an average of 11.1 per cent. Meanwhile, for-profit retail super funds returned 9.7 per cent, meaning industry funds outperformed their competitors for all periods out to 15 years.</p>
<p>The funds were resilient even in the face of political and economic shocks such as  the election of Donald Trump as US President and Brexit.</p>
<p>"It's been a really interesting and, in many ways, surprising year because this strong result has been achieved against a backdrop of considerable uncertainty, both political and economic,” Chant West director Warren Chant said. </p>
<p>“It just shows how markets – which represent the combined views of thousands of professional investors – are able to cut through the 'noise' and focus on the investment fundamentals.”</p>
<p><a href="https://www.propertyobserver.com.au/images/2017/07/20/ChantWest.png" target="_blank">Click to enlarge</a></p>
<p><img src="https://www.urban.com.au/images/2017/07/20/ChantWest.png" alt=""></p>
<p>Rival researcher, SuperRatings, came up with similar results, with the average fund return for last financial year topping 10.4%. </p>
<p>SuperRatings estimates that $140 billion has been added to super accounts in investment earnings for the year.</p>
<p>“At a time when inflation hovers below 2% per annum, Australian super funds continue to far exceed expectations, with accrued earnings of well over 100% since the end of the GFC. Over the last 5 years alone, funds have averaged 10% earnings every year, more than erasing the pain of the GFC and putting retirees in a significantly improved position than they could ever have hoped for,” said Jeff Bresnahan, SuperRatings chairman.</p>
<p>Industry fund Hostplus topped the list with a 13.2 per cent return, with even the worst-performing fund in the median-growth category delivering 7.4 per cent, according to Chant West.</p>
<p><a href="https://www.propertyobserver.com.au/images/2017/07/20/SuperRatings.png" target="_blank">Click to enlarge</a></p>
<p><img src="https://www.urban.com.au/images/2017/07/20/SuperRatings.png" alt=""> </p>
<p>Funds in the median growth category have 61 per cent to 80 per cent allocation to growth assets and are usually the preferred ones. </p>
<p>Funds that excelled this year tended to go against the investment trend, by having higher allocations to unlisted assets, which traditionally come at a significantly higher cost than the increasingly popular passive strategies, said SuperRatings in a media release. </p>
<p>“This once again debunks the argument that low cost investment strategies are good for Australians. Low cost passive strategies will only guarantee chronic regular underperformance, which will impact retirement benefits for all Australians and undermine the superannuation system.”</p>
<p>The top 10 performing funds in 2016/17 covered more than 6 million Australians and all exceeded the SuperRatings’ Industry Benchmark of 10.4%, it said.</p>
<p><a href="https://www.propertyobserver.com.au/images/2017/07/20/SuperRatingsOverall.png" target="_blank">Click to enlarge</a></p>
<p><img src="https://www.urban.com.au/images/2017/07/20/SuperRatingsOverall.png" alt=""></p>
<p class="p1">The key points to note for the 2016/17 financial year, according to Chant West were.</p>
<ul>
<li>Hedged international shares were the strongest performing asset sector, surging 18.9%. However, the appreciation of the Australian dollar pulled this return back to 14.7% in unhedged terms.</li>
<li>Australian shares performed strongly with a return of 13.8%.</li>
<li>After being the strongest performer in 2015/16, Australian listed property was the worst performing sector this year, falling 5.6%. Global listed property fared better, but still returned just 2.2%. Unlisted property, on the other hand, had another solid year, up 10.3%.</li>
<li>Infrastructure also performed well, with global listed infrastructure up 11.1% and unlisted infrastructure delivering returns in the low teens. Private equity also provided a healthy return of 11.3%.</li>
<li>The traditional defensive asset sectors yielded very low returns. Australian and international bonds barely made it into positive territory with returns of 0.2% and 0.5%, respectively, while the return from cash was just 1.8%.</li>
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prateek24-ezbwHMbNAk

Super funds deliver double-digit returns for eighth year in a row

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<p><span style="line-height: 1.3em;">While the residential property market may be slowing, it is probably time to lock in your investment in commercial property, going by the rate of returns for the year ended March 31.</span><span style="line-height: 1.3em;"> </span></p>
<p><span>Commercial property delivered an average annual return of 14 percent, according to the Property Council-PD Australia All Property Index, now managed by MSCI, said a report in the <em>Australian Financial Review</em>.</span></p>
<p><span>The index measures only directly held property investments and excludes gearing in its calculations.</span></p>
<p><a href="/images/2016/05/18/Screen%20Shot%202016-05-19%20at%209.05.07%20AM.png" target="_blank"><span>Click to enlarge</span></a></p>
<p><span><img src="/images/2016/05/18/Screen%20Shot%202016-05-19%20at%209.05.07%20AM.png" alt=""></span></p>
<p><span>The result handsomely beat the 9.2 per cent return on property shares.</span></p>
<p><span style="line-height: 1.3em;">Rental returns drove the result. The average income yield on the $160 billion of property in the index was 6.6 per cent. </span></p>
<p><span>The S&amp;P/ASX200 A-REIT index, which includes the top 17 trusts, has delivered a 17.5 per cent total return since March 31. </span></p>
<p><span>For direct property, the March result was the best since the September quarter 2008 just before the financial crisis, the AFR report said.</span></p>
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<p><a href="/images/2016/05/18/Screen%20Shot%202016-05-19%20at%209.07.01%20AM.png" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/05/18/Screen%20Shot%202016-05-19%20at%209.07.01%20AM.png" alt=""></p>
<p><span>The Reserve Bank has long warned of the disconnect between the underlying fundamentals in the sector and the commercial prices.</span></p>
<p><span>But AMP chief economist Shane Oliver has said several times that low interest rates favour commercial property. The RBA cash rate is at a low of 1.75 percent at present.</span></p>
<p><span>The article cited executive director of MSCI, Anthony De Francesco, as saying commercial property would "hover" around the current cycle peak for the rest of this year.</span></p>
<p><span>"Concern about the weakening domestic economy and global economy are likely to constrain demand for space," he said.</span></p>
<p><span>In the past year, the aggressive demand for commercial property has cut the yield across the MSCI index by 65 basis points to 6.1 percent.</span></p>
<p><span>According to Dr De Francesco, the office sector was strengthening while retail shopping centres and industrial sectors were moderating. He also noted that the Sydney office market was strengthening, while Perth was weakening.</span></p>
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jchancellor-FAypfDUnLy

Commercial property returns come out on top 

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<p><span>The valuers HTW have advised on what is available at around $500,000 in Victorian's Gippsland district.</span></p>
<p><span>In the Traralgon area, $500,000 will buy a modern 4-bedroom home in a superior, close-in residential estate, or an older style, rural residential property on the outskirts of town. Older style properties in prime locations will generally sell for $400,000 to $500,000, especially if they have been partly renovated or have subdivision potential.</span></p>
<p><span>Sales of single dwellings in the Morwell and Moe/ Newborough areas over $500,000 are rare and generally represent large, high quality dwellings on large residential allotments or well established rural residential properties.</span></p>
<p><span>In Morwell you would be able to purchase four circa 1960s, commission style homes bringing a 7.5% to 8% rental return.</span></p>
<p><span>Standard residential properties in East Gippsland are generally well below the half million dollar level but you can spend that amount on a quality new build<br> or a well renovated period dwelling in a good spot, although these are rare.</span></p>
<p><span>Moving out of town in the Bairnsdale area, $500,000 will get you a rural residential property with a standard build of a circa 2000s, 4-bedroom, single level dwelling with a shed on up to one hectare of land. Older dwellings come with more land (up to 15 hectares) and you can get a pool, more shedding and better views for the same money. </span></p>
<p><span>Properties extending out into the Nicholson area are of the circa 1990s era and will be set up for horses with basic stables, a number of paddocks and are close enough to schools for family appeal and should be comfortably within the budget.</span></p>
<p><span>If you are looking to be closer to water you can get a modern house in the Paynesville area with a lake view, but not canal frontage, for around $500,000. </span></p>
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Gippsland's $500,000 property market: HTW

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<p><span>Brisbane suburbs Eight Mile Plains and Runcorn are heating up as investment locations within the suburban Brisbane housing ring greater then 10km from the CBD.</span></p>
<p><span>The Herron Todd White July 2015 Month In Review said the previously 'unsexy' addresses appeal to enters and are affordable given the rarity of investment options now </span>available in suburbs such as Salisbury, Stafford and Keperra. An average 1980s brick 3 bedder in Eight Mile Plains is currently let for $430 per week - a gross yield of around 4.5%</p>
<p>Brighton, Sandgate, Deagon, Boondall, Taigum or Backen Ridge were also mentioned as spots where sub-$500,000 investments can still be found.</p>
<p>Attached 2 bedroom units can be found in Coorparoo, Greenslopes and Annerley from between $300,000 to $400,000. </p>
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<p><span>The report red flagged purchasing new units developed to lure investors in areas of possible oversupply.</span></p>
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