Builder-developer ALAND has drawn back the curtain on its first city-focused new apartment development.

The North Sydney development, <a href="https://www.apartments.com.au/new-apartments/the-walden-north-sydney-173-179-walker-street-north-sydney-nsw-2060">The Walden</a>, is the first time the company has ventured this close to the city, having previously completed thousands of apartments predominantly in Sydney's west, and more recently in Gosford.

<a href="https://www.apartments.com.au/developers/aland">ALAND</a> acquired the prime North Sydney site, spanning Walker and Hampden Streets just down the road from the Victoria Cross Metro station, for $240 million in June.

Now they've unveiled the new project, a mix of one-, two-, three- and four-bedroom apartments across a 30-level building designed by Rothelowman.

[smartcode_project:default project_id=134323 project_image_fid=6384]

The Walden will capitalise on the site’s front-row position on the eastern fringe of the <a href="https://www.apartments.com.au/developments/north-sydney-nsw-2060">North Sydney</a> CBD, which offers uninterrupted Sydney Harbour views stretching from the Sydney Harbour Bridge all the way to Sydney Heads.

The main tower will be flanked by a small four-level amenity building known as The Pavilion, offering exclusive resident-only amenities including a dedicated concierge service, a sauna and private wellness studio, a gymnasium and fitness studio, a resort-style rooftop pool and sundeck.

There will also be a&nbsp;residents’ lounge, private dining and a wine cellar, and co-working facilities with an on-site meeting room and boardroom.

&nbsp;

&nbsp;

[smartcode_project:default project_id=134323 project_image_fid=6382]

ALAND Founder Andrew Hrsto said the company knew they could create something "iconic" with The Walden when they saw the site.

&nbsp;

“As a company, we had been searching for a site in one of Sydney’s blue-chip locations, spanning the Eastern Suburbs, the Sydney CBD and the North Shore, and when we had the opportunity to purchase this site, we immediately recognised that it could be something iconic – being the last development with a view offering this exceptional.

“We identified the attributes and quality of the site as being perfectly aligned for ALAND – and we feel that this off-market acquisition is a perfect opportunity to showcase our craftmanship and expertise through a truly unique offering."

[smartcode_project:default project_id=134323 project_image_fid=6399]

Hrsto pointed to ALAND’s longstanding development expertise as a significant benefit in delivering a positive outcome for The Walden.

“Being a fully integrated development and construction business with a highly experienced team, we have the benefit of in-house experts across the development spectrum, from acquisitions, design, planning, and construction, to sales, marketing, property management, through to building management.

“As one of Australia’s largest private development and construction groups, we’ve been in operation for 23 years, with a Gold Star iCIRT rating and a 100 per cent delivery success rate across numerous masterplanned and mixed-use projects – and we’re very much looking forward to bringing this expertise to The Walden and contributing to the ongoing revitalisation of North Sydney."

The Walden is the latest development in Sydney to have the 10-year Latent Defects Insurance policy by Resilience Insurance, protecting buyers from any structural or waterproofing-related issues for 10 years post-completion.&nbsp;

Demolition of existing structures on The Walden site has already commenced through specialist civil contractor Moits, with the aim of completing preparatory ground works by the end of 2025, ahead of construction commencement in early 2026.

[smartcode_project_cta:default project_id=134323]

Joel Robinson

ALAND unveils The Walden, North Sydney's latest luxury apartment development

<a href="https://www.apartments.com.au/developers/toga-group">TOGA</a> has opened sales for the final building in Macquarie Rise, its latest mixed-use development in Macquarie Park.

Since launching its <a href="https://www.apartments.com.au/new-apartments/macquarie-rise-122-herring-road-macquarie-park-nsw-2113">Macquarie Rise</a> in late 2023, TOGA has secured over 125 sales in the Herring Road development, to a range of purchasers, from first home buyers to investors and downsizers. Around 65 per cent of purchasers have been owner-occupiers.

TOGA has now launched a new release of one-, two-, and three-bedroom apartments in the final building, Saunders Rise. Many of the apartments feature multi-purpose rooms and offer views of the surrounding greenery. Also part of the release is a series of&nbsp;sub penthouses housed on the upper floors.

[smartcode_project:default project_id=89243 project_image_fid=242696]

&nbsp;

“We’re delighted with the ongoing strong interest in our Macquarie Rise development, which is testament to the need for premium housing in this much-loved Sydney suburb,"&nbsp;Allan Vidor AM, Managing Director at TOGA, said.

"We’re proud to be able to offer buyers a unique product that includes luxury amenities, spacious living areas and flexible layouts, designed to suit all kinds of buyers, from young professionals to families and investors.

“We have long been advocates of Macquarie Park, and once Macquarie Rise is complete, TOGA will have built 1,000 apartments in the area, delivering much needed homes within a thriving precinct. It’s great to see the area become renowned for high-quality apartments, proximity to amenities and green spaces."

TOGA, one of Australia’s few Gold Star iCIRT rated developers, is also handling construction of Macquarie Rise. They are on track to complete the building in 2027.

[smartcode_project:default project_id=89243 project_image_fid=310789]

Macquarie Rise boasts a prime location, placing residents within immediate reach of Macquarie Centre, Macquarie University, and the newly completed Macquarie University Metro, connecting to the Sydney CBD is just over 20 minutes.

&nbsp;

Macquarie Rise residents also have access to Club Rise, an exclusive, residents only lounge designed by luxury hotel designers Stack Studio, offering an abundance of work and break-out areas, a Pilates studio, a gym, and a karaoke room. As well as these premium amenities Macquarie Rise will also feature an impressive podium top 20m lap pool.

[smartcode_project:default project_id=89243 project_image_fid=242695]

“Offering luxury, spacious apartments in a vibrant and well-connected neighbourhood, it’s no surprise that Macquarie Rise remains popular with a range of buyers," said TOGA's General Manager of Sales, Anthony Falas.&nbsp;

"With interest rates tracking downwards, we expect the final apartments to continue to receive high levels of interest.”

Located at 122 Herring Road, Macquarie Park, the development will be delivered in partnership with Baptist Union NSW and Morling College with a value of over $400 million.

&nbsp;

[smartcode_project_cta:default project_id=89243]

TOGA launches final stage apartments in Macquarie Rise

Southern Cross Station anchors the western end of <a href="https://www.apartments.com.au/developments/melbourne-vic-3000">Melbourne</a>’s CBD, connecting metropolitan and regional rail with tram and bus interchanges in one of the city’s busiest transport corridors.&nbsp;

Just metres away, <a href="https://www.apartments.com.au/new-apartments/640-bourke-street-melbourne-640-bourke-street-melbourne-vic-3000">640 Bourke Street</a>&nbsp;will place residents in the heart of the city, with immediate access to Spencer Street trams, a growing mix of retail, hospitality and cultural venues, and a neighbourhood evolving into a lively residential precinct.

Developed by <a href="https://www.apartments.com.au/developers/far-east-consortium">Far East Consortium</a>, the 68-level project integrates a sculptural glass tower with the heritage-listed Eliza Tinsley Building on a 2,765 sqm Bourke St site.&nbsp;

[smartcode_project:default project_id=509 project_image_fid=335425]

Designed by <a href="https://www.apartments.com.au/architects/rothelowman">Rothelowman</a>, the development replaces a previously approved scheme for 813 apartments with a refined offering of just over 600 larger-format residences, responding to a growing owner-occupier demand for spacious city living.

The location sits within a dynamic pocket undergoing significant transformation. Marvel Stadium and the Docklands waterfront are less than 10 minutes away on foot, offering both sports and leisure attractions.&nbsp;

Bourke Street Mall, Queen Victoria Market, and the State Library are all within walking distance, while Flagstaff Gardens, Melbourne’s oldest park, provides a green escape just to the north.

&nbsp;

[smartcode_project:default project_id=509 project_image_fid=335422]

Proximity to some of the city’s largest employers and education hubs, including the courts precinct, legal chambers, RMIT, and major hospitals, makes 640 Bourke Street an appealing residential address for professionals, families and students alike.

Education opportunities span all levels. Nearby, Haileybury City Campus offers private schooling just a short walk from 640 Bourke Street. Just beyond the CBD fringe, Carlton Gardens Primary School, one of Melbourne’s oldest state primary schools, and Docklands Primary School provide convenient government schooling options.

Higher education is equally accessible. RMIT University’s city campus spans multiple buildings just a few blocks away, while the University of Melbourne’s Parkville campus is easily reached via tram along Swanston or Elizabeth Streets.

Victoria University’s City Queen campus, focused on law and business, is also close by, positioning 640 Bourke Street within walking distance of three of Melbourne’s major tertiary institutions.

[smartcode_project:default project_id=509 project_image_fid=335426]

The neighbourhood’s retail tapestry continues to evolve into something distinctly local and walkable. Just steps away, Woolworths Metro on Bourke Street ensures that everyday essentials are easily within reach.&nbsp;

For larger shopping trips, Spencer Outlet Centre on Spencer Street and QV Melbourne on the opposite side of the CBD broaden the offering with supermarkets, fashion, dining and specialty stores.

The lane-to-lane vibe unfolds beautifully in nearby arcades and alleys. Hardware Lane, with its European-style red-brick paving and alfresco dining, pulses with jazzy evenings and casual lunches.

A few minutes north, Howey Place and Centre Place offer leafy, boutique-lined lanes where hidden cafés and niche retailers congregate under historic glass-covered cloisters.

Completing this tapestry is the newly opened Mecca “beauty playground” on Bourke Street. Spanning 4,000 sqm over three levels, the flagship blends immersive retail within an art-deco heritage setting.

&nbsp;

[smartcode_project:default project_id=509 project_image_fid=335427]

This finely grained network of shops, eateries, arcades and service outlets defines the everyday lifestyle at 640 Bourke Street - further enriched by over 3,000 sqm of resident amenity including a Turkish-inspired pool, gym, co-working rooms and private cinemas.&nbsp;

Apartments are priced between&nbsp;$640,000 and $3.95 million. Off the plan stamp duty concessions available until October 2026. Prospective buyers can visit the on site display gallery which has&nbsp;fully built one, two, and three-bedroom apartments.

[smartcode_project_cta:default project_id=509]

640 Bourke Street: A heritage address at the heart of Melbourne

Lower North Shore development specialists&nbsp;<a href="https://www.apartments.com.au/developers/abadeen-group">Abadeen</a>&nbsp;has topped out its new local apartment development,&nbsp;<a href="https://www.apartments.com.au/new-apartments/northcote-collective-naremburn-2-6-northcote-street-naremburn-nsw-2065">Northcote Collective</a>.&nbsp;

Located in the tightly held suburb of <a href="https://www.apartments.com.au/developments/naremburn-nsw-2065">Naremburn</a>, Northcote Collective is a collection of just 58 one-, two-, and three-bedroom apartments designed by award-winning architects Rothelowman.&nbsp;

The building is just a five to 10 minute walk from the heart of Crows Nest and the new&nbsp;St Leonards and Crows Nest Metro stations. Abadeen has also brought doorstep convenience, with a ground-floor retail offering on Northcote Street.

Northcote Collective is being delivered by&nbsp;<a href="https://www.apartments.com.au/builders/decode">Decode</a> — an iCIRT-rated construction company well regarded in the new development industry.

[smartcode_project:default project_id=114189 project_image_fid=272840]

“This is an important and exciting moment for Northcote Collective, and we’re proud to celebrate this milestone with our partners, consultants, and future residents,” said Justin Brown, Executive Chairman and Founder of Abadeen.&nbsp;

“From the outset, our vision was to create something truly special for Naremburn — homes that respect the character of the neighbourhood while elevating the standard of Lower North Shore living. With connectivity to transport, retail on the doorstep and a true village lifestyle, this milestone also comes at a perfect time when buyer confidence is returning to the market. I am incredibly proud of our team and of Decode for their dedication in helping us bring this vision to life.”

[smartcode_project:default project_id=114189 project_image_fid=272865]

The development is two-tiered, with two rooftops for residents. The taller building has an impressive rooftop pool, a rare inclusion in the new Sydney apartment market. The level, with panoramic views, also includes an entertaining terrace with barbecue facilities.

Local downsizers and young professionals are showing the strongest interest in the development, with recent improvements in the property market — supported by three rate cuts in 2025 — boosting borrowing power and buyer confidence.

Auction activity across Sydney surged by almost 30 per cent in recent weeks, with clearance rates above 70 per cent — signalling a renewed wave of buyer demand.

Northcote Collective will welcome buyers in 2026.

[smartcode_project_cta:default project_id=114189]

Abadeen tops out Northcote Collective in Naremburn

Sunshine Coast-based <a href="https://www.apartments.com.au/developers/devcon-property-group">Devcon Property Group</a> has acquired one of Maroochydore’s most prominent development sites for $12 million unlocking the potentialfor a mixed-use project in the Cotton Tree precinct.

&nbsp;

The 4,178 sqm site at 41–43 Aerodrome Road—well known locally as the former home to one of Australia’s last Sizzler restaurants—was sold via an off-market expressions of interest campaign by Colliers agents Nick Dowling and Baydn Dodds. More than 70 targeted buyer groups were approached, resulting in multiple competitive offers for the property.

Devcon Property Group Managing Director Michael Kain said the acquisition was a strategic move in line with the company’s focus on delivering high-quality projects in prime coastal locations.&nbsp;

“We’re excited about the possibilities this site, in one of the Sunshine Coast’s most iconic beachside &nbsp;communities, offers for a broad range of development outcomes,” Kain said.

“Its location, ocean view potential, and proximity to the Maroochydore CBD and beach make it an &nbsp;outstanding development prospect. Our plans are to refurbish the existing building and then review &nbsp;development options for the remainder of the site.”&nbsp;

<img alt="Aerodrome Rd site overlooking Beach (Large)" data-entity-type="file" data-entity-uuid="a29dc4ed-68c1-4bec-a4fc-283063dcde1e" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Aerodrome%20Rd%20site%20overlooking%20Beach%20%28Large%29.jpg?VersionId=b0WxJWevmLoAfCP4YvGImZpR3rSCJJ9L" />

Colliers Special Projects Manager Baydn Dodds said the sale reflected the ongoing strength of the &nbsp;Sunshine Coast’s development site market, particularly for projects capable of achieving water views. &nbsp;

“Sites of this scale, in walkable beachside locations with ocean views, are tightly held and continue to attract significant interest from both local and national developers,” Baydn Dodds said. &nbsp;

“Holding a prominent position as the former home to one of Australia’s last Sizzler restaurants and more recently occupied by Rashays, the prime site is located just 150 metres from Maroochydore Beach.&nbsp;

“With stunning ocean view potential, located in one of the Sunshine Coast’s best known iconic &nbsp;beachside communities, within steps of shops, cafes and the beach it is no surprise that there was strong interest in the site. The transaction highlights the ongoing depth of demand for well-located &nbsp;mixed-use sites across the Sunshine Coast.”&nbsp;

Colliers Sunshine Coast Managing Director Nick Dowling said the transaction reinforced the &nbsp;Sunshine Coast’s status as one of Australia’s most active development markets.&nbsp;

“The combination of strong population growth, lifestyle appeal, and infrastructure investment is &nbsp;driving demand for quality development opportunities,” Nick Dowling said. &nbsp;

“The Sunshine Coast is one of only three markets nationally to record an increase in crane numbers, &nbsp;reflecting the strength of the region’s construction pipeline.&nbsp;

“Opportunities like this are rare and continue to generate strong buyer interest in the region.”&nbsp;

The Sunshine Coast development market is booming, with several high-profile developers like Cube Developments, Gardner Vaughan Group, and RCQ, planning developments in the region.

Devcon buys Sunshine Coast’s former Sizzler site for new apartment development

Property Investor

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Australia now has 2,156,319 property investors, according to the ATO.
                     Tax year 2016-17         Tax year 2015-16
One property             1,536,112           1,493,982
Two properties              407,971              395,910
Three properties            125,915              122,654
Four properties                46,460              45,229
Five properties                 19,504              18,872
Six or more                     20,357               20,017
Total                          2,156,319          2,096,664
That's a jump of 59,000 fresh investors in the 2016-17 tax year.
But the number of investors with six or more properties has barely risen with the latest ATO tally putting it at 20,357 investors in the 2016-17 tax year.
It was 20,023 in tax year 2015-16.
It is this six or more investor demographic that has attracted the attention of Opposition Leader Bill Shorten in his pursuit of negative gearing changes.
The Opposition leader Bill Shorten has conceded that Labor's negative gearing/capital gains tax reforms were not “universally loved.”
“I would rather see more young couples buy their first home, than spend billions subsidising investors acquiring multiple properties,” Shorten argues.
“All of the experts know that with scarce taxpayer dollars it’s better to put money into health and aged care than give a tax subsidy to someone buying their sixth or seventh investment property,” Mr Shorten said.
According to ATO statistics a steady 71 per cent of the Australians with rental properties have just the one investment.
That's 1,536,112 individuals with the one property.
There are 1,300,344 individuals who own loss making rental properties.
There are 855,975 individuals who are in a rent neutral/profit situation with their rental investment.
An interest in a property means the property is solely owned, jointly owned or part-year owned – for example, bought or sold a property during the year.
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j.ballantyne1990-6AQqhLzZaK

Australia now has 2,156,319 property investors

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EXPERT OBSERVER
Despite the material correction in housing markets, residential property investors remain markedly more optimistic than non-investors.
<div>
Investors sit front and centre in the housing market correction currently unfolding in Australia. For the first time, the Westpac Melbourne Institute Consumer Sentiment survey provides some insight into who this segment is and how they are assessing things.
An additional classification question added to the survey in Dec now allows us to separately identify consumers that own residential investment properties. The first results show an interesting breakdown on both the characteristics of this sub-group and their sentiment – the latter of particular interest given both the investor-driven housing market downturn and associated concerns about potential ‘wealth effect’ spillovers to demand.
At the aggregate level, 18.7% of respondents reported owning a residential investment property, broadly in line with official statistics.
Consumers in NSW, WA and Vic were slightly more likely to be housing investors while those in Qld showed the lowest incidence (15%). Not surprisingly the share of investors rises steadily across age groups, peaking at 27% for those aged 55-64, dropping back sharply to 14% for those over 65 (noting that this group is less likely to be accessing the tax benefits of negative gearing).
Again in line with the official statistics, the incidence of investor housing ownership is higher for those on high incomes (31%) and amongst consumers that are owner occupiers (24%). So-called ‘rentvesters’ account for just 7% of tenants.
Turning to the sentiment readings, housing investors are markedly more optimistic than non investors with an average sentiment read over Dec-Jan of 114.7 vs 101 for non investors and 103.7 for all consumers.
Note that this does not appear to be a by-product of income differences – across every income band, housing investors have more positive sentiment reads than non investors.
The positive spread is across all index components but is most pronounced for ‘finances vs a year ago’ (+16pts) and least pronounced for ‘finances, next 12mths’ (+6pts) – an intriguing mix that suggests investors have been unperturbed by price falls over the last year but that expectations of further declines may be curbing optimism for the year ahead.
On housing, investors are more positive on ‘time to buy’ but more negative on the price outlook. They also view ‘real estate’ more favourably as the ‘wisest place for savings’, particularly compared to ‘deposits’, but are slightly more inclined towards repaying debt than non investors.
Read the full report: <a href="https://westpaciq.westpac.com.au/wibiqauthoring/_uploads/file/Australia/2019/January/WestpacRedBookJanuary2019.pdf" target="_blank">'Red Book January 2019' (PDF 453kb)</a>
<img src="https://westpaciq.westpac.com.au/wibiqauthoring/_uploads/image/The_Red_Book/Red_Book_bites/Redbook-bite-20190131-2.jpg" alt="">
MATTHEW HASSAN is a Senior Economist for Westpac
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Matthew_Hassan-HHWHptmrw4

Sentiment of housing investors more optimistic than non-investors: Matthew Hassan

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Investors and owner occupiers will at times act very differently when dealing with their residential property assets, CoreLogic recently noted.
Over the September 2016 quarter, 9.2 percent of owner occupiers resold their homes at a loss compared to 9.8 percent of investors across Australia, but with strong regional variations.
Across the major regions of the country, Sydney, Regional Victoria and Hobart were the only regions in which owner occupiers were more likely to resell at a loss than investors.
Across the combined capital cities, 6.7 percent of owner occupiers resold their dwellings at a loss over the quarter compared to 7.9 percent of investors.
In Melbourne and the Australian Capital Territory, investors were twice, almost three times as likely to resell at a loss as owner occupiers.
<a href="https://www.propertyobserver.com.au/images/2017/01/30/Corelogic-22.jpg" target="_blank">Click to enlarge</a>
<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/2017/01/30/Corelogic-22.jpg" alt="">
Regional markets saw 13.0 percent of owner occupiers and 14.4 percent of investors resell their properties at a loss over the quarter.
In regional NT, investors were more than twice as likely to resell at a loss as owner occupiers.
Clearly it is more beneficial for an owner occupier or an investor to resell their property at a profit.
In a falling market owner occupiers may be more prepared to sell at a loss if they are purchasing their next home at an equivalent or greater discount, CoreLogic noted.
Meanwhile, investors, because of taxation rules, would seemingly be more prepared to incur a loss because they (unlike owner occupiers) can offset those loses against future capital gains.
CoreLogic noted the taxation system may potentially create risks in the future, particularly considering the heightened level of investment buying activity over recent years.
If home values fall in the future, investors (which have been increasingly active) may be more inclined to sell at a loss and offset those losses which in turn could result in much more supply becoming available for purchase at a time in which demand for housing falls because values are declining.
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Canberra investors copping property losses: CoreLogic Pain and Gain

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SPONSORED POST
When considering property investment it pays to look at what the professionals do - the big industry and retail superannuation funds and institutional investment organisations such as insurance companies.
Professional investors generally allocate anywhere from 8 percent to 15 percent to property within their portfolio. These institutional investors live or die by their results – there is no room for emotion or personal preference. 
So what types of property?
One sub-class of property the professionals do not typically hold is residential. Why? Because long-term average yields on residential property are generally inferior to quality investment grade real estate.
Commercial property on the other hand is able to generate distribution yields in excess of 6.50 percent for investors. The dispersed or small scale nature of residential property means the costs associated with the accumulation and management of residential property also contribute to it being viewed as a less than optimal option.
Of course dinner parties are peppered with wonderful residential success stories, but headline numbers and real rates of return can sometimes be poles apart. Residential real estate investment has high transaction costs including stamp duty, legal and agent fees, and  holding costs of land tax, insurance, council/water rates, external property management, vacancies, repairs and capital gains tax.
Whilst some of these costs are also applicable to commercial property, many costs like repairs, insurance and rates are often paid for by the tenant instead and other costs are lower due to the economies of scale obtainable (such as agents fee). The other big difference is that the rents paid by commercial tenants are generally much higher as a percentage of the cost of the initial investment. 
Further, the heat in the residential real estate markets in Sydney and Melbourne is showing some signs of coming off the boil. Hopefully this will allow a chance to regroup and make more considered decisions.
Professional investors typically invest in investment-grade commercial property such as offices, warehouses, hospitality and shopping centres. The term ‘investment-grade’ is critical. In short, it means high quality buildings with high quality tenants, often with long leases, which translates into strong and predictable earnings flows.
The two pathways to investment-grade commercial property are Real Estate Investment Trusts (REITS) and unlisted property trusts, also often known as ‘direct property’. Charter Hall is now one of the largest and most successful commercial property investment group’s in Australia and consistently holds up to five of the top 10 performing funds as ranked by performance in The Property Council/IPD Australian Unlisted Core Retail Property Fund Index.
Regardless of what type of property, take the time to consider the full suite of property options available and proceed with care with a trusted and well respected Manager.
Steve Bennett is fund manager for Direct Property, Charter Hall and can be contacted <a href="https://www.charterhalldirect.com.au/?utm_source=propertyobserver&amp;utm_medium=post&amp;utm_content=charterhalldirectproperty&amp;utm_campaign=mk4" target="_blank">here</a>.
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jchancellor-FAypfDUnLy

What kind of property should be in my investment portfolio? Charter Hall

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The Investar website has identified five localities around Australia where rental yields sit at nine percent or higher.
But would you invest in any of them?
 
Rank Suburb State Postcode Dwelling Type Bedrooms Median Listing Price Weekly Median Rent Rental Yield
1 BROKEN HILL NSW 2880 House 2 $99,500 $200 10.45%
2 MANOORA QLD 4870 Unit Studio &amp; 1 $95,000 $190 10.40%
3 ZEEHAN TAS 7469 House 3 $79,000 $150 9.87%
4 PALM COVE QLD 4879 Unit Studio &amp; 1 $175,000 $310 9.21%
5 WOREE QLD 4868 Unit 2 $160,000 $280 9.10%
 
{mijopolls 135}
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jonathanchancellor-7SQnKwU6yx

Australia's top five rental yield locations: property investor poll

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GUEST OBSERVER
When planning on investing in property for the first time it is important to prepare yourself for the six main steps in any property journey (establishing finance, asset selection, negotiation, settlement, property management and portfolio review).
With thorough research and preparation you can go from a novice to a property owner in three or so months.
Month one
First things first: you should settle on your objective. In doing so, ask yourself the following questions:
<ul>
<li>What is it that I am after? Am I entirely investment focused?</li>
<li>What’s my budget?</li>
<li>When am I looking to buy?</li>
</ul>
To help you answer these questions seek the advice of a financial advisor to establish a financially viable budget and repayment plan that won’t leave you with unmanageable debt.
With your objective and budget determined start on your desktop research. This should involve studying the property market in your intended area and its surrounds. Those searching within two to ten kilometres of the CBD should pay particular attention to the auction/sale results, lifestyle factors, property types, capital growth and rental demand. It is also a good idea to visit your local library to access newspaper archives on past auction results and sale prices. This will give you an indication about whether the area you are looking in is one with proven capital growth.
Month two
Now is the time to get off the computer and take what you have learnt from your desktop research to auctions. Visit open for inspections and upcoming auctions for properties that are similar to what you are after in terms of location and property style. Doing so gives you knowledge of the current market and an up to date grasp of what fits your budget.
It would also be advisable to take this time to secure a conveyancer and if the property is for investment purposes, a property manager. Selecting a conveyancer before buying allows them to look over the sale of contract prior to the auction or sale. This limits last minute stress in having to find one just before or dealing with any unexpected conditions that may be in the contract.
Month three
You have done the footwork and know what you want to buy; where you want to buy and how you will finance it; and are now ready to find the right property for you.
With everything organised and in place start visiting properties, getting inspections done and attending auctions with the intention to bid. Keep in mind all your research to help keep you calm and in control throughout the whole purchasing process. Remember that while you may not win the first property, you are in the right position, knowledge wise, to find the right one even if it takes a while. 
Jarrod McCabe is associate director, Manager of Property Team, Wakelin Property Advisory.
When is a pre-purchase building inspection a must?  What do they entail?  How does one interpret the results?  What defects can be fixed and which ones should prompt you to walk away. Jarrod McCabe, associate director, Wakelin Property Advisory and Peter Alexander, building inspector, Safehome Building Inspections present a webinar for Victorian home buyers on April 20. <a href="https://wakelin.com.au/inspection">Click here to register</a>.
 
 
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Property 101: Planning for your first investment property with Wakelin Property Advisory's Jarrod McCabe

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Li Ruipeng, the Chinese businessman on the run from authorities in China and at the centre of a luxury watch gifting scandal in Canberra, has been hiding out on the Gold Coast, according to the Australian Financial Review.
Mr Li, whose instant noodle and property company owes millions of dollars to suppliers, staff and money lenders across China, is also in legal trouble in Australia, was in Australia as recently as last week.
Court documents show Mr Li is involved in 27 legal disputes on the mainland, owes creditors at least $30 million and is being investigated for illegal fundraising.
Mr Li often boasted of his political connections in Australia. He displayed photographs of these contacts in his office, including the now infamous shot of him in June 2013 with ousted human services minister Stuart Robert, former Australian prime minister and then opposition leader Tony Abbott and Ian Macfarlane, who at the time was opposition industry spokesman.
At the dinner Mr Li gave all MPs, as well as the wives of Mr Abbott and Mr Robert, designer watches. They were initially accepted, assumed to be fakes, but later returned.
Greg Roberts, compliance manager at Wealthcare Custodians, is taking legal action against the Chinese businessman.
Wealthcare, which was set up in 2005, had hoped to leverage Mr Li's contacts and build up a business providing advice to wealthy Chinese investors, particularly those looking to take part in the Significant Investor Visa program.
Sydney firm Wealthcare Custodians Limited confirmed it was taking legal action against its former chairman after he disappeared last year owing almost $300,000.
Wealthcare offer the investor the ability to consider a number of investment options; from the safety of bank and foreign exchange accounts over the major universal currencies, as well as a more actively managed growth fund. 
The growth fund offers a range of diversified, actively managed property and manufacturing opportunities, spread over rural, residential, retail, commercial, industrial, tourism and infrastructure sectors. Of particular focus are the areas of hospitals, aged care facilities and educational facilities in areas of need around Australia.
Its Australasian Infrastructure Trust was specifically designed and created to enable high net worth Chinese investors and their families around the world, to avail themselves of the Australian Federal Government’s Significant Investor Visa (SIV), which allows qualifying participants to apply for permanent residency in Australia.
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Chinese Rolex giver being pursued by Wealthcare

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GUEST OBSERVER
The renewed turmoil in global financial markets on worries about global growth has provided a reminder that we remain in an investment environment of constrained capital growth and high volatility. 
This has several implications for investors around interest rates and the yield investments provide.
First, interest rates are likely to remain low for longer: the Bank of Japan has cut interest rates on excess bank reserves to -0.1%, the ECB is likely to ease further, the Fed is backing away from rate hikes and the RBA is more likely to cut rates than increase them.
<a href="/images/2016/02/13/Screen%20Shot%202016-02-13%20at%209.17.04%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/02/13/Screen%20Shot%202016-02-13%20at%209.17.04%20AM.png" alt="">
Second, it reminds us about the importance of the yield an investment provides as opposed to just relying on capital growth.
Third, while a fall in the capital value of an investment is unsettling, the cash flow it provides is generally a lot more stable and becomes relatively more attractive during periods of market declines. But what do we mean by yield? Why is it so important? And where can it be found?
What is investment yield?
The yield an investment provides is basically its annual cash flow divided by the value of the investment.
For bank deposits the yield is simply the interest rate, eg bank 1 year term deposit rates in Australia are around 2.4% and so this is the cash flow they will yield in the year ahead.
<a href="/images/2016/02/13/Screen%20Shot%202016-02-13%20at%209.18.17%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/02/13/Screen%20Shot%202016-02-13%20at%209.18.17%20AM.png" alt="">
For 10-year Australian Government bonds, annual cash payments on the bonds (coupons) relative to the current price of the bonds provides a yield of 2.5% right now.
For residential property the yield is the annual value of rents as a percentage of the value of the property. On average in Australian capital cities it is about 4.2% for apartments and around 2.8% for houses. After allowing for costs, net rental yields are about 2 percentage points lower.
For unlisted commercial property, yields are around 6% or higher. For infrastructure investment it averages around 5%.
For a basket of Australian shares represented by the ASX 200 index, annual dividend payments are running around 5.3% of the value of the shares. Once franking credits are allowed for this pushes up to around 6.9%.
<a href="/images/2016/02/13/Screen%20Shot%202016-02-13%20at%209.20.04%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/02/13/Screen%20Shot%202016-02-13%20at%209.20.04%20AM.png" alt="">
Yield and total return
The yield an investment provides forms the building block for its total return, which is essentially determined by the following.
Total return = yield + capital growth
For some investments like term deposits the yield is the only driver of return (assuming there is no default). For fixed interest investments it is the main driver – and the only driver if bond investments are held to maturity – but if the bond is sold before then there may be a capital gain or loss.
For shares, property and infrastructure, capital growth is a key component of return, but dividends or rental income form the base of the total return. Prior to the 1960s most investors focused on yield, particularly in the share market where most were long-term investors who bought stocks for dividend income.
This changed in the 1960s with the “cult of the equity”, as the focus shifted to capital growth. It was pushed further through the bull markets of the 1980s and 1990s.
Similarly at various points in the cycle real estate investors have only worried about price gains and not rents.
<a href="/images/2016/02/13/Screen%20Shot%202016-02-13%20at%209.21.15%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/02/13/Screen%20Shot%202016-02-13%20at%209.21.15%20AM.png" alt="">
Why yield matters?
In times like the present a focus on the income an investment provides is important. First, with interest rates set to remain low or fall further, bank deposit rates – already at their lowest in Australia since the 1950s – are likely to remain low or go lower.
Our view is that further falls are likely as the RBA is likely to cut official interest rates to 1.75% in the next six months on the back of global uncertainties, sub-par growth and benign inflation. This in turn means an ongoing need to understand and consider alternative sources of yield on offer.
Second, a high and sustainable starting point yield for an investment provides some security during volatile times like the present. For example since 1900 dividends have provided more than half of the 11.6% total return from Australian shares and as can be seen in the next chart their contribution has been stable in contrast to the swings in the capital value of shares.
Dividends are relatively smooth over time. Companies hate having to cut them as they know it annoys shareholders so they prefer to keep them sustainable.
Finally, as baby boomers retire, investor demand for income will likely be high as the focus shifts to income generation.
Alternatives to term deposits for yield
The chart below shows the yield on a range of Australian investments. Yields on global investments tend to be lower.
All of these yields have fallen over the last few years as interest rates have fallen, but as can be seen several of the alternatives do offer much more attractive yields than term deposits.
Australian 10-year bond yields are now around 2.5%. This will be the return an investor will get if they hold these bonds to maturity. They can generate a higher return if yields continue to fall, but they are already very low. Global bond yields are lower, averaging around 1%.
After the house price boom of the past twenty years the rental yield on capital city houses is just 2.8% and that on apartments is around 4.2% and even lower after costs.
Corporate debt is an option for those who want higher yields than term deposits but don’t want the volatility of shares. For Australian corporates, investment grade yields are around 6.5% or less and lower quality corporate yields are higher.
Sub investment grade corporate bond yields in the US are actually now yielding around 9% as worries partly about loans to energy companies have pushed them higher.
Following the turmoil of the GFC Australian real estate investment trusts (A-REITs) have refocused on their core business of managing buildings, collecting rents and passing it on to their investors, with lower gearing. While their distribution yields have declined as rental growth has not kept up with total returns of 15% over the last 5 years, they are still reasonable at 4.8%.
Unlisted commercial property also offer attractive yields, around 6% for a high quality well diversified mix of buildings, but higher for smaller lower quality property. And it doesn’t suffer from the overvaluation of residential property.
Unlisted infrastructure offers yields of around 5%, underpinned by investments such as toll roads and utilities where demand is relatively stable.
Australian shares also fare well in the yield stakes. The grossed up dividend yield on Australian shares at around 6.9% is well above term deposit rates meaning shares actually provide a higher income than bank deposits. In fact the gap is now back to levels seen during the GFC.
Investing in shares of course entails the risk of capital loss.
<a href="/images/2016/02/13/Screen%20Shot%202016-02-13%20at%209.12.17%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/02/13/Screen%20Shot%202016-02-13%20at%209.12.17%20AM.png" alt="">
But a way to minimise this risk is to focus on stocks that provide sustainable above average dividend yields as the higher yield provides greater certainty of return. The next chart compares initial $100,000 investments in Australian shares and one-year term deposits in December 1979.
The term deposit would still be worth $100,000 (red line) and last year would have paid $3200 in interest (red bars).
By contrast the $100,000 invested in shares would have grown to $1.04 million (blue line) and would have paid $50,770 in dividends before franking credits (blue bars). The point is that dividends tend to grow over time (because an investment in shares tends to rise in value) and to be relatively stable compared to income from bank deposits which vary with interest rate settings. 
Key issues for investors to consider
While there is a strong case for investors to focus on investments offering a decent yield there is no such thing as a free lunch.
All of the alternatives come with a risk of volatility in the value of the underlying investment. In the case of shares the key for an investor is to work out whether they want a stable value for their investment in which case bank deposits win hands down or a higher/more stable income flow in which case Australian shares win hands down.
More broadly, in searching for a higher yield investors need to keep their eyes open. It’s critical to focus on opportunities that have a track record of delivering reliable earnings and distribution growth and are not based on significant leverage.
In other words make sure the yields are sustainable. On this front it might be reasonable to avoid relying on some Australian resources stocks where current dividends look unsustainable unless there is a rapid recovery in commodity prices.
 
<a href="https://www.propertyobserver.com.au/https://plus.google.com/110172465327488162875?rel=author" target="_blank">SHANE OLIVER</a> is head of investment strategy and economics and chief economist at <a href="https://www.ampcapital.com.au/home" target="_blank">AMP Capital</a> and is responsible for AMP Capital's diversified investment funds.
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