Repeat buyers are one of the strongest measures of confidence in any apartment development.

At <a href="https://www.apartments.com.au/new-apartments/era-newcastle-west-124-126-bull-street-newcastle-west-nsw-2302">ERA</a> in Newcastle West, some purchasers are returning to <a href="https://www.apartments.com.au/developers/gwh">GWH</a> after living at the developer's One Apartments. Their decision to purchase again was driven by the quality of life they found after moving into their first GWH home.

Keith Wilton had spent years living in a house in East Maitland before deciding it was time for a change. Apartment living had always been on his radar, but he was selective about what he wanted.

<iframe allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen="" frameborder="0" height="315" referrerpolicy="strict-origin-when-cross-origin" src="https://www.youtube.com/embed/FH_1EzB-1vs?si=XScVlP1ERsTDJoME" title="YouTube video player" width="560"></iframe>

"I had some boxes I wanted to tick," he says.

Keith points to the open-plan design, generous outdoor areas and considered inclusions as key reasons One Apartments worked for him.

“One of those things was a nice indoor open plan area, but also I wanted a nice outdoor open area that I could entertain on in summer or Christmases or birthdays,” he says.

He also found value in the smaller details, from integrated appliances to shared resident spaces including the pool, cinema and rooftop areas.

[smartcode_project:default project_id=135096 project_image_fid=356818]

After comparing several developments, he chose One Apartments because of GWH's longstanding local reputation and his own experience working with the developer on a commercial project more than a decade earlier.

"I knew that they were local, that the quality of the build was going to be up there. I'd looked at other apartment complexes around and close by, and I just knew that here was a better decision location wise."

Today, Keith says the move has completely changed how he experiences Newcastle.

"I enjoy living in this location because it's more of a lifestyle change. That Newcastle city living where you can walk to restaurants and bars and even beaches and parks and even shopping across the road."

[smartcode_project:default project_id=135096 project_image_fid=356828]

Beyond the location, he says it's the sense of community that has surprised him most.

"Everyone loves living here because they chose to live here, but everyone looks out for each other. It's a real great community feel here."

For Aimee and Lyle Goodman, the journey started almost by chance.

<iframe allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen="" frameborder="0" height="315" referrerpolicy="strict-origin-when-cross-origin" src="https://www.youtube.com/embed/tsioMLcnjas?si=zq-ys3JuWpfa5hFv" title="YouTube video player" width="560"></iframe>

The couple happened to be having coffee in Newcastle when they noticed the site where One Apartments was about to begin construction.

"We were aware GWH was planning a development," Aimee says. "We made one phone call and things moved pretty quickly after that."

As busy business owners, they initially thought apartment living would simply reduce the maintenance that came with larger homes. Instead, it fundamentally changed how they spent time together.

"We actually catch up more as a family now," Aimee says.

"We've had homes with big yards and lots of space, but everyone ended up in different rooms. Here we'll have dinner together, the kids can play, and we spend far more quality time together."

[smartcode_project:default project_id=135096 project_image_fid=356829]

Lyle says their confidence came from GWH's reputation within Newcastle's building industry.

"I know people who've worked across different apartment projects, and whenever GWH came up the feedback was always the same. They're rock solid. They're quality."

That confidence only grew throughout the buying process.

"One of the things that really impressed us with GWH was the whole process, was the communication," Lyle says. "It was consistent, it was regular, there was no problem if we had some weird questions, there was no problems in getting answers."

[smartcode_project:default project_id=135096 project_image_fid=351104]

Aimee says one moment stood out.

"The project actually finished on time. We realised we needed to hurry up and sell our house because everything was happening exactly when they said it would."

The positive experience at One Apartments ultimately gave all three buyers the confidence to purchase again with GWH, this time at ERA.

Their confidence reflects what many buyers are seeking in today's apartment market. Location remains important, but so too does certainty around delivery, quality and long-term liveability.

[smartcode_project:default project_id=135096 project_image_fid=356822]

ERA builds on those foundations with 280 one, two and three-bedroom apartments across two landmark towers in <a href="https://www.apartments.com.au/developments/newcastle-west-nsw-2302">Newcastle West</a>.&nbsp;

Designed by <a href="https://www.apartments.com.au/architects/fk-australia">Fender Katsalidis</a>, the project will include more than 2,000 square metres of resident amenities, including a resort-style pool, gym, sauna, private cinema and rooftop entertaining spaces overlooking the harbour and coastline.&nbsp;

The development is also within walking distance of the Newcastle Interchange, Honeysuckle, Darby Street, the harbour foreshore, restaurants, retail and the city’s beaches, continuing the walkable lifestyle that existing GWH buyers say has transformed how they live.

[smartcode_project:default project_id=135096 project_image_fid=356826]

For Keith, the appeal remains straightforward.

"You feel at home even before you've moved into your home."

For Aimee, the change is measured in time.

“I just felt like I had more time,” she says.

[smartcode_project:default project_id=135096 project_image_fid=351102]

Construction at ERA is now underway, with more than half of the residences already sold and limited two and three-bedroom apartments remaining in the East Tower release. Priced from $980,000 for two-bedroom residences and $1.46 million for three-bedroom residences, buyers can secure an apartment with a 10 per cent deposit, with premium homes offering ocean views from Level 8 and harbour views from Level 10.

ERA is also backed by Resilience Insurance's 10-year Latent Defects Insurance policy, providing protection against structural or waterproofing defects for 10 years after completion. The project is anticipated to be completed in early 2028.

[smartcode_project_cta:default project_id=135096]

Joel Robinson

From ONE to ERA: Why buyers are choosing GWH again in Newcastle West

Virgate Property Group is preparing to commence construction of Verdé, its new apartment development in Melbourne's Arts Precinct at Southbank, following a strong run of sales that has seen more than half of the project's 173 apartments secured.

Verdé has attracted a broad mix of first home buyers, owner-occupiers upgrading from nearby inner-city suburbs and investors, with younger owner-occupier couples aged between 28 and 45 accounting for the strongest enquiry. Many are already living in Southbank, South Melbourne, Albert Park, Port Melbourne, South Yarra and the CBD.

"Verdé is located in one of the most desirable pockets of southern Melbourne," Blair Property Group Director Darren Blair, who is managing sales at Verdé, said.

"It's within walking distance of the Arts Centre, Royal Botanic Gardens, Albert Park Lake, and Southbank's restaurants and retail. It's a great lifestyle location with strong amenity and liveability, which made it a very attractive choice for the project."

[smartcode_project:default project_id=4661 project_image_fid=372549]

Virgate was already familiar with the precinct, having previously delivered the successful Domain House development in neighbouring South Melbourne. That experience gave the developer confidence to acquire the Coventry Street site and continue expanding its presence in Melbourne's inner south.

"We had been keeping an eye on the site and the broader precinct for a few months before deciding to move forward with the acquisition," Virgate said.

The project was ultimately secured in 2020 following feasibility studies, planning assessments and due diligence, with the brief centred on delivering "a high-quality, considered design that feels both refined and fit for purpose."

[smartcode_project:default project_id=4661 project_image_fid=314259]

Designed by <a href="https://www.apartments.com.au/architects/bruce-henderson-architects">Bruce Henderson Architects</a>, Verdé comprises 173 one, two and three-bedroom apartments priced from $599,000. The architecture is distinguished by a faceted glass façade that responds to both the site's outlook and Melbourne's changing light conditions.

According to Bruce Henderson Architects, the coloured glazing gives the building a distinctive identity while also providing privacy and solar shading, with residences oriented to capture views across the bay, city skyline and surrounding parklands.

Inside, <a href="https://www.apartments.com.au/interior-designers/designoffice">DesignOffice</a> has created interiors focused on natural light, efficient planning and enduring materials. Apartments feature engineered oak flooring, natural stone benchtops, floor-to-ceiling glazing and SMEG appliances, while a restrained material palette aims to complement the expansive outlooks rather than compete with them.

[smartcode_project:default project_id=4661 project_image_fid=372550]

Resident amenity has also been designed around everyday functionality rather than occasional use. Facilities include a concierge-serviced lobby, residents' lounge with fireplace, library and co-working space, gym, terrace garden with barbecue facilities, ground-floor café, and package delivery management.

The project's location continues to be one of its strongest drawcards. Positioned on Coventry Street, Verdé sits within walking distance of the National Gallery of Victoria, Arts Centre Melbourne, Royal Botanic Gardens and Albert Park Lake, while Southbank's dining precinct, Sturt Street trams and the new ANZAC Station are all nearby. The surrounding education catchment also includes Melbourne Grammar, Melbourne Girls Grammar, Mac.Robertson Girls' High School and several major university campuses.

The sales team says buyers have responded particularly well to the combination of location, design quality and long-term liveability.

"They're responding really positively to the quality of the design, premium resident amenities and the uninterrupted views. Many also appreciate the location and how connected it is to everything they need."

The ability to secure stamp duty savings before completion has also been a key factor for purchasers, alongside the opportunity to personalise finishes ahead of settlement.

With construction set to commence soon and more than half the apartments already sold, Verdé enters its next phase as one of the Arts Precinct's more established apartment developments, offering remaining buyers an opportunity to secure a residence before construction advances further. Expected completion is scheduled for late 2027.

[smartcode_project_cta:default project_id=4661]

Virgate's Verdé Southbank moves toward construction as sales fly past halfway stage

Downsizer-focused apartment development Kooyongkoot in Hawthorn has been recognised at the 2026 Better Future Melbourne Design Awards, taking home Gold and Silver awards in two categories.

<a href="https://www.apartments.com.au/new-apartments/kooyongkoot-hawthorn-1-kooyongkoot-road-hawthorn-vic-3122">Kooyongkoot</a>, currently being delivered by developer PQD and designed by Cera Stribley, received Gold in the Interior Design – Proposed category and Silver in the Architecture – Proposed category.

The dual recognition reflects the design approach behind the boutique development on prestigious Kooyongkoot Road, where the focus has been on creating homes for downsizers seeking the space, quality and functionality of a detached house within a low-rise apartment building.

Rather than maximising apartment numbers, <a href="https://www.apartments.com.au/developers/pqd">PQD</a> and <a href="https://www.apartments.com.au/architects/cera-stribley-architects">Cera Stribley</a> limited the development to just 18 residences, allowing for larger floorplans, greater privacy, generous landscaping and expansive communal spaces.&nbsp;The majority of the apartments also benefit from corner aspects, allowing for dual sources of natural light.

Now around 70 per cent complete and on track for completion in November 2026, Kooyongkoot will comprise a mix of garden residences, ter​race apartments, sub-penthouses, and is crowned by two half-floor penthouses with direct lift access and private rooftop terraces.

[smartcode_project:default project_id=102717 project_image_fid=355297]

The Silver Award for Architecture recognised the way the building responds to its prominent corner position at the ent​rance to Hawthorn's Scotch Hill precinct, one of Melbourne's most established residential neighbourhoods.

Rather than competing with the grand homes that line Kooyongkoot Road, the architectural approach focused on restraint and longevity, using curved brickwork, generous landscaping and carefully considered proportions to integrate with the existing streetscape.

"The form feels fluid and timeless, as though shaped by the landscape itself – architecture that belongs, rather than competes," said Chris Stribley, Co-Founder and Managing Principal of Cera Stribley.

The judging submission also highlighted practical innovations throughout the building, including lift cores servicing only nine homes each, a central landscaped lightcourt designed to bring daylight and ventilation into the building, and fully enclosed private storage rooms with lighting, power and shelving to better accommodate residents transitioning from larger family homes.

[smartcode_project:default project_id=102717 project_image_fid=355293]

The Gold Award for Interior Design recognised the project's focus on long-term liveability rather than display-home aesthetics.

According to the awards submission, the interiors were designed from the inside out, prioritising how homes would function over decades of daily use through generous proportions, practical storage, durable natural materials and flexible layouts.

The specification includes natural stone throughout, upgraded acoustic glazing, V-ZUG appliances and fully enclosed storage rooms, alongside an amenity offering focused on wellness, entertainment and everyday convenience.&nbsp;

Residents will have access to a gym and yoga studio, a wellness centre featuring traditional and infrared saunas, a cold therapy shower and treatment room, as well as a residents' lounge and golf simulator/cinema room for entertainment.&nbsp;Kooyongkoot has also considered the everyday convenience of its residents by offering a private carwash and pet wash facilities on site as well as dedicated parcel lockers and oversized fully enclosed storage rooms.&nbsp;

[smartcode_project:default project_id=102717 project_image_fid=355303]

The project's attention to detail has already resonated with buyers. Earlier this year, Kooyongkoot recorded one of Boroondara's highest apartment sales when an $8 million penthouse was purchased by a Melbourne CEO downsizing from a nearby family home.

"Every detail feels deliberate, from the overall design down to the smallest touches," the purchaser said.

"The level of quality and refinement is exceptional, but what really sold it was how liveable it felt... It felt like a place where everything had been considered, not just a luxury building."

[smartcode_project:default project_id=102717 project_image_fid=355304]

Sustainability also formed a key part of both award submissions. Kooyongkoot is targeting a minimum 7.5-star NatHERS rating across all residences, supported by passive design principles, high-performance glazing, EV charging infrastructure, water reuse systems and a wellness model focused on lower-energy dry facilities rather than pools and large wet areas.

Located within walking distance of Scotch College, Methodist Ladies' College, Koo​yong Lawn Tennis Club, Aubur​n Village and Camberwell Junction, Kooyongkoot continues to target owner-occupiers looking to remain in Melbourne's inner east without compromising on space or quality. A limited selection of two, three and four-bedroom residences remains available, with prices starting from $1.9 million.

[smartcode_project_cta:default project_id=102717]

Kooyongkoot wins Gold and Silver at Better Future Melbourne Design Awards

New apartment supply has become increasingly constrained across <a href="https://www.apartments.com.au/developments/parramatta-nsw-2150">Parramatta</a> in recent years, with fewer projects progressing through to completion as development conditions have become more challenging.

It makes <a href="https://www.apartments.com.au/developers/novm">NOVM</a>'s 2021-completed <a href="https://www.apartments.com.au/buildings/the-lennox-parramatta-12-phillip-street-parramatta-nsw-2150">The Lennox</a> one of the most recently completed residential towers on the Parramatta River, and among the newest apartment developments in Sydney's second CBD.

With the project largely completed before the sharp escalation in construction costs and inflation following the pandemic, The Lennox is now offering pricing that would be difficult to replicate in a comparable new development in Parramatta today, or across much of Western Sydney.

The majority of the 413 apartments at The Lennox sold before and shortly after completion. A limited release of the remaining apartments has recently been brought to market by capital partner <a href="https://www.apartments.com.au/project-marketer/equitifund-group">Equitifund</a>, with entry-level pricing from $700,000 and two-bedroom apartments available from under $1 million.

Rising above the Parramatta River at 12 Phillip Street, The Lennox comprises one, two, three and four-bedroom apartments, appealing to first home buyers, young professionals, families, downsizers and interstate investors seeking a completed apartment in one of Australia's fastest-growing economic centres.

[smartcode_project:default project_id=5743 project_image_fid=372394]

Rather than positioning Parramatta as an alternative to Sydney's CBD, Equitifund believes the city has reached a point where it stands on its own merits.

"Parramatta is no longer simply an alternative to Sydney CBD, it's becoming a destination in its own right," Equitifund Executive Chairman Greg Huxley said.

"The Lennox captures that evolution with a level of quality and amenity that's difficult to match at its price point."

[smartcode_project:default project_id=5743 project_image_fid=953]

Designed by <a href="https://www.apartments.com.au/architects/marchese-partners">Marchese Partners</a>, the tower responds directly to its riverfront setting through expansive glazing and open-plan layouts that maximise views across the Parramatta River and city skyline. Interiors feature engineered timber flooring, stone benchtops, stainless steel appliances and floor-to-ceiling glazing, while generous balconies extend the living spaces outdoors.

Marchese Partners says the project was conceived to balance high-quality apartment living with practical, long-term functionality, pairing larger, efficient floorplans with amenities more commonly associated with five-star hotels.

That emphasis continues through the resident facilities, which include a 20-metre rooftop swimming pool, fully equipped gym and wellness spaces, full-time concierge, a residents' lounge, function room, private lifts, secure basement parking and rooftop communal areas overlooking the Parramatta River. Ground-floor boardwalk retail and dining further activate the riverfront and integrate the building into the surrounding public realm.

[smartcode_project:default project_id=5743 project_image_fid=925]

Australian housing and finance group Equitifund has secured the remaining apartments, believing there are few completed apartment opportunities in Parramatta that offer the same combination of location, amenity and pricing.

Equitifund National Sales Director Ben Hamblett says buyers are increasingly recognising that premium apartment living no longer needs to come with Sydney CBD pricing.

"The Lennox is where aspirational living becomes attainable," Hamblett said.

"Wake to river and mountain views, step into Sydney's Second CBD, and arrive home to resort-calibre amenities, all without the harbour price tag."

Hamblett says owner-occupiers are also attracted by the convenience of having Westfield Parramatta, Church Street's dining precinct, Parramatta Park, Riverside Theatres, Western Sydney University and major transport connections all within walking distance.

"At The Lennox, lifestyle is not an afterthought, it is the foundation."

[smartcode_project:default project_id=5743 project_image_fid=5374]

The Lennox places residents within walking distance of Parramatta Square, Westfield Parramatta, Church Street Eat Street, Parramatta Station, the ferry wharf, Light Rail, the future Sydney Metro West, Parramatta Park and CommBank Stadium, reinforcing Parramatta's position as one of Australia's most connected metropolitan centres outside Sydney's CBD.

Equitifund says buyers visiting the display suite consistently comment on the quality of the finishes, generous floorplans, river and skyline views, and the walkability of the location. The project has attracted a broad mix of local professionals, upsizers, downsizers, buyers relocating from Sydney's inner suburbs and interstate investors seeking long-term growth opportunities.

That demand aligns with Parramatta's continued evolution as an economic powerhouse. Equitifund Research and Market Insights specialist John Bekiaris says sustained population growth, infrastructure investment and expanding employment opportunities continue to support long-term housing demand across the city.

"Parramatta has evolved from a satellite city into one of Australia's most important economic centres. Population growth, infrastructure investment and employment are all supporting sustained long-term housing demand."

[smartcode_project_cta:default project_id=5743]

The apartment price gap drawing Sydney buyers west

A luxury beachfront apartment at Rainbow Bay has more than doubled in value since it sold off the plan six years ago, setting a new local apartment record in the process.

The three-bedroom apartment in the Flow development on Petrie Street, the first of four new projects locally by Paul Gedoun's S&amp;S Projects, has sold for $7.4 million, after originally selling for $3.27 million when the project launched in 2020.

The seventh-floor apartment, comprising 187 sqm of internal living space and a 54 sqm balcony overlooking Froggies Beach and Snapper Rocks, was purchased by a local family.

The transaction was negotiated by Pezet Matheson director Kerry Pezet and equates to more than $30,000 per sqm.

Pezet said the sale reflected the limited opportunities to buy into the boutique beachfront development.

"The sale highlights the rarity of opportunities within the boutique beachfront development, where residences seldom become available," Pezet said.

"Flow is one of the Gold Coast's most tightly held buildings. Buyers from our database move quickly when residences become available, and achieving an off-market sale at $7.4 million demonstrates the depth of demand for property of this calibre."

<img alt="Flow" data-entity-type="file" data-entity-uuid="c585b206-2130-4eee-a50c-3f27c51a7c70" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-06%20at%208.33.25%E2%80%AFPM.png?VersionId=m3pHRDV62Y3fvN.XQuQHq.52ilTWpRLf" />

Flow was the first of four luxury apartment developments delivered by Paul Gedoun's S&amp;S Projects at Rainbow Bay and was completed in 2023.

Positioned on the beachfront overlooking Snapper Rocks, the residence includes three bedrooms, three bathrooms, a powder room and views stretching north along the coastline towards Surfers Paradise.

Pezet Matheson Residential principal Mitchell Lambert said buyers continued to prioritise quality beachfront apartments in tightly held locations.

"Flow Residences offers a rare combination of elevated beachfront positioning, architectural excellence, comprehensive resident amenity and premium finishes, which is exactly what discerning purchasers are seeking," Lambert said.

"The transaction further reinforces Rainbow Bay's reputation as one of Australia's premier coastal lifestyle destinations, where limited supply and growing demand continue to support strong market performance."

Pezet Matheson originally marketed and sold out Flow off the plan, making the latest transaction a return to one of the project's original buyers.

Paul Gedoun is selling his third project, <a href="https://www.apartments.com.au/new-apartments/radia-rainbow-bay-271-boundary-street-coolangatta-qld-4225">Radia Rainbow Bay</a>, after recently completing, and selling out, <a href="https://www.apartments.com.au/buildings/esprit-217-227-boundary-street-coolangatta-qld-4225">Esprit</a>. He has plans for a <a href="https://www.apartments.com.au/news/qld/first-look-s-s-projects-proposes-88-apartment-wellness-tower-at-coolangattas-boundary-street">fourth building</a>, 88 apartments on <a href="https://www.apartments.com.au/new-apartments/209-213-boundary-street-coolangatta-qld-4225">Boundary Street</a>.

Rainbow Bay apartment doubles in price since off the plan sale during pandemic

Residential Market

jchancellor-FAypfDUnLy

How are Australia’s states and territories performing? CommSec's Craig James

<html><body>
Queensland’s Toowoomba sits on the list of most-searched suburbs list for 2015 by rent.com.au.
The median rent for all rental properties advertised in Toowoomba earlier this year was $267 per week, a fall of 5.31 percent from the last previous quarter. 
Toowoomba’s median price was also well below the median of $290 per week for surrounding suburbs which include East Toowoomba, Harristown, Newtown, North Toowoomba and South Toowoomba. 
The average days on market for all rental properties advertised in Toowoomba within the last 90 days improved by 15 days to 27 from the last quarter. Toowoomba also did better than the 40 days on market for surrounding suburbs.
Out of a total of 10 rental properties advertised in Toowoomba within the 30 days, six were houses and four were apartments. 
The price range of advertised properties was from $180 for a two-bedroom dwelling to $380 for four bedrooms.
As an illustration, Property Observer came across a couple of dwellings up for rent around the median price on <a href="https://rent.com.au/" target="_blank">rent.com.au</a>:
<img src="/images/2016/04/29/rent_1apartment.jpg" alt="" width="475" height="356"> A two-bedroom apartment at <a href="https://www.rent.com.au/property-apartment-toowoomba-4350-1711428" target="_blank">1/115 South Street, </a><a href="https://www.rent.com.au/property-apartment-toowoomba-4350-1711428" target="_blank">Toowoomba</a>, is up for rent at $270 per week. 
<img src="/images/2016/04/29/700_woomba2.jpg" alt="" width="532" height="326">
A three-bedroom house at <a href="https://www.rent.com.au/property-house-toowoomba-4350-1759878" target="_blank">8 Hamwood Street</a>, is up for rent at $300 per week.
</body></html>

prateek24-ezbwHMbNAk

QLD's Toowoomba has median rent lower than neighbours: rent.com.au

<html><body>
Yes, I know everyone hates elections but the more I look at this election the more I like it simply because real estate is front and centre.
History will judge whether the government and opposition erred by allowing negative gearing into the debate, although what they have done is to finally open that can of worms which previously had been removed from all discussions.
When you take the time to contemplate the direction that property prices are headed (thanks mainly to all these new developments) there are plenty of dark clouds building. For mine; the smartest solution is to simply limit the number of investment properties to a single tax file number. Opinions vary that negative gearing is driving the values of property although investors account for just one third (approximately) of purchases, so that in itself can’t be the major contributor.
The problem why Australia’s property prices are so high sees the blame at failed political policies where prices have increased two to three times than that when the Baby Boomers were buying property – which by the way were single income families. Governments have failed miserably when it comes to infrastructure where we only ever hear of Very Fast Trains in an election year – come July 2, we in all probability won’t hear it mentioned for another three years.
Opinions when it comes to real estate are always interesting where today we see many property markets starting to ease and nobody comes out and states that this is actually a good thing. Many of Australia’s property markets are actually self-medicating and correcting which is great news given the damage a crash can cause. Naturally we should not also forget that property markets historically slow when an election is announced although many parts of Australia had already started to re-calibrate their prices downwards – we have passed the peak.
This week we saw that for the first time in seven years Australia was now recording deflation – which immediately called for the Reserve Bank of Australia (RBA) to cut the cash rate when they meet next week. Even if it were to cut the cash rate say – 0.25 you can rest assured that the banks won’t be passing this on.
I’ve been on the public record as being opposed to federal government policy in December 2008 when off – the – plan – purchases by foreigners were raised from 50 to 100 per cent – the governments have not addressed nor even discussed this. With interest I have noted that this month the ANZ, Commonwealth Bank and this week Westpac are no longer lending money to foreign buyers wanting to buy residential property in Australia.
The major lenders have already implemented black – spot areas where they will no longer finance new apartment developments. Interestingly nobody has even bothered to raise this with any politicians given this is a significant stance by the major lenders that relates directly to government policy. Now we can expect this to remain the case for quite a few years to come with Sydney and Melbourne embarking on massive new development construction – the major lenders have massive exposure here.
Now should the ALP be elected what does this do to their new policy regarding negative gearing? I can tell you what it will do to off – the – plan acquisitions (new property) – it will shut it down almost immediately. Investors are not permitted to buy existing properties, only new – despite 93 per cent of investors preferring to buy existing.
One would think that there should be much more debate about the repercussions to the economy with the major lenders now not lending to foreign buyers. Then of course one can’t rule out a significant price correction given these new developments are massively over valued due mainly to foreign buyers driving these prices. Investors aren’t going to be buying into these new developments for negative gearing purposes when they know full well that these properties are facing a significant value correction.
One only has to look at the body language of the major banks to see quite clearly they have already commenced direct action to minimise their exposure to this newly created property market.
The problem as I see it is that politicians are making some huge mistakes in judgement when it comes to our property markets but sadly nobody is asking them the right questions. A classic example of this the banks deciding to restrict all loans to foreign buyers which is in direct contradiction to the federal governments policy – which we all know is dumb. Even funnier is that the government did not bat an eyelid when the major lenders announced this policy review.
<h5>MOSMAN – 2088</h5>
Number of houses on the market this time last year – 61
Number of houses on the market last week – 43
Number of houses on the market this week – 45
Number of apartments on the market this time last year – 52
Number of apartments on the market last week – 50
Number of apartments on the market this week – 55
<h5>CREMORNE – 2090</h5>
Number of houses on the market this time last year – 1
Number of houses on the market last week – 7
Number of houses on the market this week – 9
Number of apartments on the market this time last year – 15
Number of apartments on the market last week – 26
Number of apartments on the market this week – 26
<h5>NEUTRAL BAY – 2089</h5>
Number of houses on the market this time last year – 2
Number of houses on the market last week – 11
Number of houses on the market this week – 11
Number of apartments on the market this time last year – 30
Number of apartments on the market last week – 27
Number of apartments on the market this week – 23
ROBERT SIMEON is a director of <a href="https://www.rwm.com.au/" target="_blank" title="RWM" rel="nofollow">Richardson Wrench Mosman and Neutral Bay</a> and has been selling residential real estate in Sydney since 1985.  He has also been writing real estate blog <a href="https://www.rwm.com.au/news/" target="_blank" title="Virtual Realty News" rel="nofollow">Virtual Realty News</a> since 2000.
</body></html>

robertsimeon-hRNTwJyXkQ

Why I am liking this election: Robert Simeon

<html><body>
<img src="https://counter.theconversation.edu.au/content/57114/count.gif" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
Will this budget mark the inception of a new deal for Australian cities? And will it herald a new dawn for Australian local democracy?
Addressing the Australian Public Service in the Great Hall of Parliament on April 20, Prime Minister Malcolm Turnbull chose to emphasise that “smart cities” would be the engine room of innovation and growth in Australia’s new economy to be delivered through the concept of “City Deals”.
Turnbull said:
The “City Deal” approach used in the United Kingdom has been instrumental in the renaissance of Manchester and Glasgow, and we believe there are many elements that can be applied in Australia.
<h4>Turnbull’s address to the Australian Public Service.</h4>
But what is the value proposition underpinning the “City Deal”? And can it be applied here in Australia?
<h2>The value proposition</h2>
The value proposition has historical, democratic and economic foundations.
Historically, it builds on the role of iconic cities in the advance of civilisations. For example, the following quotation from Mel Sirotkin’s evocative work perfectly captures the central role of Manchester as the engine room of the Industrial Revolution:
During the Industrial Revolution Greater Manchester seized the initiative to become the world’s ﬁrst modern industrial metropolis. It is home to the nation’s ﬁrst public library, the birthplace of modern chemistry, and the professional football league. It is where Dalton developed atomic theory and Rutherford split the atom. Inevitably it is also where the rainproof mackintosh was invented.
Democratically, it forms the next logical stage in the UK’s constitutional reform program, which began under Tony Blair in 1997. Blair delivered Scotland’s parliament and assemblies for Northern Ireland and Wales, but the English voted “no” to English assemblies on the basis that this would be too much government to bear.
The argument for delivering devolution through existing rather than new institutions – in this case city regions – has proved far more palatable.
However, it is the economic credentials of the “City Deal” that prove most powerful. The Cameron government believes that larger local government units such as city regions led by elected mayors with new powers will help spread prosperity. This is based on evidence – such as from the independent RSA City Growth Commission – that the areas with the fastest growth and innovation around the world tend to have:
<ul>
<li>
large populations;
</li>
<li>
good connectivity;
</li>
<li>
high skill levels;
</li>
<li>
good infrastructure (including housing);
</li>
<li>
strong higher education institutions; and
</li>
<li>
empowered local leadership.
</li>
</ul>
The powers that the UK government is devolving to city regions are therefore focused mainly in areas such as transport, business support, infrastructure development and training.
A further economic argument for devolution to cities is that they provide a concentration of population and need. These in turn provide a potential focal point for innovation to foster economic development and improve service delivery and effectiveness.
In part, the argument is that necessity will be the mother of innovation. But there are also arguments that the greater scale of a city region provides fertile conditions for economic development. There is likely to be a greater pool of talent, experience and resources to draw upon.
Working across a larger area can promote more effective services. In many cases outcomes are likely to be better if several services are connected together. That applies, for example, to health and social care, to the various educational, health and social services that engage with families in trouble, and to the various bodies that can help prevent re-offending.
The argument for devolution to cities in England is mostly not about democracy, and more about economic competitiveness and service effectiveness.
<h2>What’s been achieved so far?</h2>
The way the deals have been negotiated reinforces the sense that this is about efficiency more than democracy. Deals have been cut within Whitehall in a top-down approach with various city regions according to their ambition and political clarity.
In most cases, an elected mayor has been added to the mix to provide a fig leaf of democratic legitimacy. But many of the deals have been criticised as a stitch-up between city and national elites with little input from citizens and little prospect of citizen control.
On the other hand, the ad-hoc approach of doing the deals city by city, region by region, means that progress has been rapid. Substantial devolution is occurring.
Although some worry about creating an unequal governance framework, others argue it’s about doing what works for different cities. The pragmatic patchwork program has been deliberately designed such that no two city regions must necessarily have the same deal and level of devolution.
The Greater Manchester City Deal is by far the most advanced but only started this month. So, in truth, it’s too early to say how the deals will work in practice.
<h2>How do City Deals translate to Australia?</h2>
It is easy to see why the “City Deal” concept resonates with the Turnbull agenda. The image of the Australian city region as a centripetal catalyst to economic growth is both in keeping with the gravity of international evidence and the demographic changes articulated in the 2015 Intergenerational Report. This forecast a range of significant productivity problems arising from shifts in demography, workforce and participation.
It also provides a living laboratory for Turnbull’s National Innovation and Science Agenda and, in particular, the work of Data 61 and the Digital Transformation Office.
Most tangibly, it provides an opportunity for Turnbull to connect the government’s agenda to the everyday lives of Australians. This is something the polls suggest he has been unable to achieve so far.
<h2>What would need to change make it happen?</h2>
There are maximalist and minimalist versions of the “City Deal”. The minimalist version would be simply to negotiate a series of Commonwealth-funded programs with states and territories to lubricate the innovation agenda in Australian cities. The maximalist version, required to emulate the UK “City Deal”, would require constitutional change.
Devolution UK-style involves the transfer of power to a lower level, in this case to a local city or city region administration. However, unlike its European and North American counterparts, Australia’s political elite still has a strange, unfathomable disdain for local government – which is not shared by its citizenry.
Most significantly, devolution is not in the gift of Commonwealth government, as local government is a creature of state and (to a lesser extent) territory government. Changing federal powers requires constitutional change.
As Turnbull himself admits:
"It requires a firm commitment to collaboration. Success is dependent on federal, state and local governments agreeing on a set of long‐term goals for cities and the investments, policies and regulatory settings to achieve them."
Is it likely that state governments would cede authority over the jewel in their crown – the state capital? It would be like turkeys voting for Christmas.
The smart money is on the minimalist version even though Australia’s future economic prospects require the courage and ambition of the maximalist version.
Mark Evans is professor of Governance and Director of the Institute for Governance and Policy Analysis and NATSEM, University of Canberra and can be contacted <a href="https://theconversation.com/profiles/mark-evans-97204" target="_blank">here</a>.
Gerry Stoker is fellow and Centenary Professor, Institute for Governance and Policy Analysis, University of Canberra and can be contacted <a href="https://theconversation.com/profiles/gerry-stoker-155351" target="_blank">here</a>.
Both are authors for The Conversation.
</body></html>

Will Budget 2016 deliver a new deal for Australian cities?

<html><body>
There’s a chasm-sized gap between perception and reality in Australian real estate.
A recent survey of consumers by MLC found there’s a widespread belief that homes are beyond the grasp of first-time buyers and that future generations won’t be able to afford to buy. That’s the common perception and it comes as no surprise, given that mainstream media keeps banging on about an affordability crisis, amid claims that the dream is dead.
The reality is quite different. As I wrote last week, the latest Affordability Index from the HIA has found that affordability nationally is the best it’s been in over five years and that some parts of Australia have the best level of affordability since 2003. Clearly, Sydney is an exception, although there was improvement in the March Quarter.
Reinforcing that point is the actual activity of first-time buyers. The latest NAB Quarterly Australian Residential Property Survey indicates that 33.5% of sales of new dwellings in the March Quarter were to first-time buyers.
That suggests first-time buyers are the dominant buying force in new properties, having a greater market share than owner-occupiers (other than first-home buyers), Australian investors and foreign investors.
In addition, the NAB survey finds that 26 percent of established dwellings were sold to first-time buyers – also a strong market share, though less than owner-occupiers (other than first-home buyers), who make up 43 percent of the market for established homes.
There’s a stark contrast there is the results of two surveys. The MLC survey found most people think young buyers are being priced out of the market and that 58% believe the next generation will be forced to rent all their lives. But the NAB survey found first-time buyers are out there in force and, in the new-home sector, are dominating the market.
Why so different? It’s because the NAB report was based on a survey of property professionals who are at the coalface daily and know what’s going on. The MLC survey was based on consumers, whose perceptions about what’s going on are influenced by media sound bytes.
Media reportage of real estate is overwhelmingly negative and that’s reflected in the MLC survey results – which are interesting but ultimately worthless because they contradict reality.
Generally, the NAB survey found that industry sentiment improved in the March Quarter, after having fallen for the previous three quarters.
Sentiment was strongest in Victoria. This makes sense, because while the Sydney boom is over, Melbourne still has momentum.
Expectations for price growth are strongest in Victoria. Melbourne and Brisbane are expected to be the best price performers in 2016, while Perth (also not surprising) has the weakest expectations for prices among the capital cities.
The findings for the apartment markets also make sense. Unit prices are expected to fall in Perth (because of a weak economy) and Melbourne (because of oversupply).
The survey found foreign buyers were less of a force in the market – and have switched their focus from NSW and Victoria to Queensland, where foreigners account for 20 percent of sales of new properties.
This reflects the ramping up of marketing of high-rise units in Brisbane and on the Gold Coast, two markets that smart investors will avoid.
 
Terry Ryder is the founder of <a href="https://www.hotspotting.com.au/" target="_blank">hotspotting.com.au</a>. You can <a href="https://mailto:ryder@hotspotting.com.au" target="_blank">email him</a> or follow him on <a href="https://twitter.com/hotspotting" target="_blank">Twitter.</a> 
 
 
</body></html>

terryryder-YECXbqmri2

Sydney boom over, Melbourne has momentum and avoid Brisbane: Terry Ryder

<html><body><div class="page" title="Page 49">
<div class="section">
<div class="layoutArea">
<div class="column">
Adelaide is a rising market for houses, while for units the recovery is only starting, according to valuation firm Herron Todd White's property clock for April 2016. But HTW focuses more on the fringe suburbs of this South Australian city.
Fringe suburbs are those where buyers have usually traded off a central location for price. Examples of fringe suburbs for detached housing in Adelaide are Woodcroft and Happy Valley to the south, Gulfview Heights to the north and Athelstone to the north- east.
Woodcroft
Woodcroft is situated approximately 20 kilometres south of the Adelaide CBD adjacent to the suburbs of Morphett Vale and Reynella East. Accessibility to the suburb has been enhanced since the duplication of the Southern Expressway. There are courtyard style dwellings (circa 1990s) and older style dwellings available in the low $300,000 range which provide a good entry level point for first home buyers. Newer housing and detached housing on larger allotments typically sell in the $450,000 to $600,000 range.
Weekly rents typically range between $300 and $480 depending on overall property features with an average yield of 4.8% (source: realestate.com.au).
<a href="https://www.realestate.com.au/property-house-sa-woodcroft-121248970" target="_blank">9 Tuscany Way, Woodcroft</a> is a 3-bedroom, 1-bathroom courtyard style dwelling on a 352 square metre allotment which recently sold for $307,500. This property is currently listed for rent at a weekly rental of $320 which reflects an initial yield of 5.4%.
<a href="https://www.realestate.com.au/property-house-sa-woodcroft-120619693" target="_blank">8 Topaz Close, Woodcroft</a> is a 3-bedroom, 2-bathroom dwelling on a 556 square metre allotment which recently sold for $360,000. This property is currently listed at $390 per week which reflects an initial yield of 5.6%.
Happy Valley
Happy Valley is situated adjacent to the suburbs of Aberfoyle Park and Reynella East and is approximately 20 kilometres from the Adelaide CBD. There are 1970s and 1980s style detached dwellings available in the low to mid $300,000 range which are entry level properties for first home buyers. Newer housing and renovated housing on larger allotments generally ranges between $450,000 and $650,000.
Weekly rents typically range between $300 and $480 depending on overall property features with an average yield of 4.9% (source: realestate.com.au). There are currently limited dwellings recently sold listed for rent which indicates reasonable demand from owner-occupiers.
Gulfview Heights
Gulfview Heights is 20 kilometres north of the Adelaide CBD and is adjacent to Salisbury East, Wynn Vale and Para Hills. Development comprises 1970s and 1980s dwellings with a section of larger, more modern housing constructed in the late 1990s and early 2000s. Older style housing within the high $200,000 to low $400,000 range is attractive to first home buyers. Newer and more modern housing generally sells in excess of $500,000.
Weekly rents typically range between $300 and $500 depending on overall property features with an average yield of 4.9% (source: realestate.com. au). There are currently limited dwellings in Gulfview Heights which have recently sold that are listed for rent. This indicates reasonable demand from owner- occupiers.
Athelstone
Athelstone is an established north-eastern suburb situated 12 kilometres from the Adelaide CBD. Development comprises predominantly 1970s and 1980s dwellings with sections of increasing infill development. Older style dwellings typically sell within a range of $400,000 to $500,000 with newer dwellings selling in excess of $600,000.
Weekly rents typically range between $300 and $550 depending on overall property features with an average yield of 4.0% (source: realestate.com. au).
4 Kurrajong Avenue is a 3-bedroom, 2-bathroom 1970s Spanish style dwelling on a 715 square metre allotment which recently sold for $520,000. This property is currently listed for rent at a weekly rental of $380 which reflects an initial yield of 3.8%.
Sale example:
The following sales illustrate the difference in price for similar dwellings in Woodcroft compared with the suburb of Unley, a highly regarded area within three kilometres of the Adelaide CBD. 
11 Mildara Close, Woodcroft, sold 4 March 2016 for $337,500
</div>
<div class="column">
<div class="page" title="Page 50">
<div class="section">
<div class="layoutArea">
<div class="column">
<img src="/images/2016/04/15/Screen%20Shot%202016-04-15%20at%209.10.50%20PM.png" alt="">
This property comprises a circa 1993 3-bedroom, 1-bathroom dwelling situated on a 315 square metre allotment with an equivalent area of 138 square metres. The property includes an updated kitchen, single garage (under the main roof) and a rear verandah (source: RP Data). 
<div class="page" title="Page 50">
<div class="section">
<div class="layoutArea">
<div class="column">
10 Boothby Court, Unley, sold 19 January 2016 for $615,000
<img src="/images/2016/04/15/Screen%20Shot%202016-04-15%20at%209.12.56%20PM.png" alt="">
This property comprises a circa 1994 3-bedroom, 1-bathroom semi-detached dwelling situated on a 300 square metre allotment with an equivalent area of 150 square metres. The property includes a single garage (under the main roof) and a rear verandah (source: RP Data). 
A potential purchaser in Woodcroft would be 17 kilometres further from the CBD which is the trade- off for the large reduction in price ($277,500 or 45% difference) compared to the Unley property.
Quality housing in suburbs within 10 kilometres of the CBD continues to experience good demand. Given this, there are more residents moving further from the CBD to seek housing within an affordable price bracket. There is increasing infill development within Athelstone and Happy Valley as well as new development in Woodcroft which is improving the overall appeal of these suburbs. Although further from the CBD, these locations are well serviced with local shopping facilities in good proximity.
These suburbs provide good opportunities for first home buyers seeking detached housing within the $300,000 to $400,000 price bracket. These opportunities are few and far between within close proximity to the CBD with the exception of smaller unit style accommodation. These areas have fairly consistent levels of demand from buyers and tenants alike. The outer northern suburbs (Playford Council area) comprising areas close to Elizabeth and the Holden Manufacturing plant continue to experience negative sentiment with the effects of the imminent closure of the plant in 2017 yet to transpire. 
 
 
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div></body></html>

Adelaide fringes are a good buy for FHBs: HTW

<html><body>
The Bondi hoarder’s house has returned to the market once again with the potential to sell for more than $2 million.
More than 14 months after Mary Bobolas and her daughters Elena and Liana came up with the $180,000 to pay Waverly Council’s cleaning and legal bills, the home is once again being forcibly sold.
A statement from Waverley Council said the family now owes $160,000.
The sad case of <a href="https://www.realestate.com.au/property-house-nsw-bondi-118903099" target="_blank">19 Boonara Ave</a> sees the NSW Sheriff’s Office commissioning Raine &amp; Horne Double Bay agent Ric Serrao to sell the property so that clean-up costs can be recovered on behalf of the council.
The 550 sqm property offers proximity to the beach, cafes, restaurants, shops and public transport.
No inspections of the home are scheduled.
When it was listed in 2015, around 63 contracts were issued, but the Bobolas family managed to come up with the money just hours before last year’s auction.
The property is listed for a May 19 auction.
</body></html>

Bondi hoarders home back for sale

<html><body>
The Hobart housing market has been the nation’s weakest performing capital city housing market for more than a decade.
There are now signs that the Hobart (and Tasmania’s) housing market may be in line for a steady improvement.
<a href="/images/2016/04/27/Chart-1-2-580x208.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/04/27/Chart-1-2-580x208.jpg" alt="">
Over the 12 months to March 2016, home values in Hobart have increased by 4.8 percent while over the past two years values are only 4.5 percent higher highlighting that the value growth performance has been much stronger over the past year relative to the previous year.
The above chart shows the annual change in home values across all capital cities, with Hobart and the combined capital cities highlighted and the other cities in grey.  Although Hobart values have increased over the past year, the recent rise must be put in context, over the past decade home values in Hobart have increased at an annual rate of 1.5 percent with values falling at an annual rate of -0.7 percent over the past five years.  Hobart’s decade growth performance is well behind Perth which has recorded the second lowest annual rate of growth over the period at 3.1 percent.
<a href="/images/2016/04/27/Chart-2-2-580x207.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/04/27/Chart-2-2-580x207.jpg" alt="">
It is interesting to look at the performance of the Hobart housing market in context with the performance of the Melbourne market. The previous chart shows that in 2003 and 2004 home value growth in Hobart surged. The rate of growth reached a peak of 57.9 percent annual growth in November 2003 and very shortly thereafter the growth performance in Hobart stalled and has been limited ever since.
The surge in Hobart dwellings came following a surge in Melbourne home values and at a similar time to which the rate of growth in Melbourne values began to slow.  Ever since the end of the last surge in home values in Hobart, Melbourne has recorded strong rises in home values while growth in Hobart has been minimal.
Melbourne has obviously recently seen a large surge in home values meaning that many home owners have substantial levels of equity in their property. Investment in the Tasmanian housing market which offers much lower home values and superior yields may be looking attractive for those in Melbourne looking for a lifestyle investment.
<a href="/images/2016/04/27/Chart-3-2-580x207.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/04/27/Chart-3-2-580x207.jpg" alt="">
While value growth in Hobart is picking up, transaction volumes are relatively steady from where they were at the end of last year and virtually unchanged from a year ago.  In comparison, most other capital city housing markets are actually recording fewer property transactions than they were a year ago.
<a href="/images/2016/04/27/Chart-4-2-580x206.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/04/27/Chart-4-2-580x206.jpg" alt="">
Looking at the current market, listings provides one of the best guides about the balance between buyers and sellers.  As listings move lower, buyers have less choice and vendors can be less flexible on their price expectations which can push values higher.  Over the 28 days to 17 April 2016 there were 376 newly advertised properties added to the Hobart housing market and 2,189 total property listings. 
New listings are 1.3 percent higher than they were a year ago and fairly flat over recent weeks.  Meanwhile, total listings are -26.2 percent lower than they were a year ago and as the table shows they are trending lower.  In fact, the number of listings is at its lowest level since October 2010.  With new listings slightly higher than a year ago and total listing much lower it suggests that there is limited new supply coming to the market with increasing demand which is causing total listing volumes to trend much lower.
<a href="/images/2016/04/27/Chart-5-2-580x210.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/04/27/Chart-5-2-580x210.jpg" alt="">
One of the main drivers of the surge in Hobart home values in 2003 and 2004 was the positive migration trends for Tasmania.  The above table shows that in 2003 and early 2004 both net overseas and net interstate migration were positive.  The chart also shows that typically there is an outflow of residents of Tasmania to other states and territories while net overseas migration is usually positive.  Over the past few quarters, for the first time in a number of years, net interstate migration to Tasmania has been positive.  It is still early days but should this trend continue over the coming quarters it could be a positive for the Tasmania housing market.
<a href="/images/2016/04/27/Chart-6-1-580x208.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/04/27/Chart-6-1-580x208.jpg" alt="">
People will generally only move to a new region if they are reasonably comfortable that they can find employment.  The unemployment rate in Tasmania has ticked up over recent months and job creation has slowed which may act as a deterrent to make the move to a market like Hobart.  However, if we look at 2003 and 2004 when home values were surging and migration to Tasmania was quite strong, job creation was stronger although the unemployment rate was in the high 6% to low 7% range compared to a similar 6.9% currently.  Keep in mind that some people will move to Tasmania and Hobart as a lifestyle choice so they may be able to do their current job remotely or may commute back to the mainland a few days a week / each month.  Furthermore, a proportion of people that move interstate would be retirees and therefore their decision is not reliant upon securing employment.
<a href="/images/2016/04/27/Chart-7-1-580x213.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/04/27/Chart-7-1-580x213.jpg" alt="">
Tourism is likely to be a growing source of employment for those living in Tasmania.  According to data from Tourism Research Australia, international visitor numbers to Tasmania increased by 19.6 percent in 2015 and have increased by 53 percent over the past five years. Meanwhile, domestic overnight trips to Tasmania increased by 17.3 percent in 2015 and have increased by 40 percent over the past five years.  Should the ramp-up in tourism continue it will create even more employment opportunities in the local economy.
When you look at the housing and economic indicators for Hobart it looks like the market is well positioned to see an increase in the rate of housing demand and subsequently home values over the coming year.  Of course Hobart also has the advantage of being a substantially more affordable housing market than all of the other capital cities.  Any of these indicators could change and most importantly if job creation picked up pace and the unemployment rate fell it would provide further positives for the local market.  Nevertheless, it looks as if the fundamentals are in place for a long-awaited improvement in value growth for the Hobart housing market.
 Cameron Kusher is research analyst for CoreLogic RP Data. You can contact him <a href="https://blog.corelogic.com.au/about/">here</a>.
</body></html>

ckusher-ujnxiKuFQs

Hobart's time to shine: Cameron Kusher

<html><body>
<img src="https://counter.theconversation.edu.au/content/57114/count.gif" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
Other than renting, the most common way to get a roof over your head is to buy a home and live in it. Another way is to buy a home and rent it out, and then rent a similar home (buy, rent, rent). Thanks to the perverse nature of negative gearing, the buy, rent, rent strategy can be cheaper than the most obvious path of home ownership. How?
Consider a first home buyer considering a modest two bedroom, two bathroom unit in Ashfield in Sydney’s inner west for A$600,000.
Assuming the buyer has enough to afford a 20% deposit and initial transaction costs (legal fees and stamp duty, etc.), she may consider buying and living in it, or buying and investing and then renting a similar unit. She is able to borrow 80% of the unit’s value paying interest of 5% p.a (A$24,000 a year). The annual maintenance costs are A$6,000 (or 1%), deductible depreciation expenses are also A$6,000. A similar unit rents for A$450 per week. Her marginal tax rate is 34.5%. What is the cost to buy and live compared with buy, rent, rent?
The first home buyer’s housing cost is A$30,000 per year if she buys and lives in the unit, and A$25,653 per year for buy, rent, rent. This means she saves A$4,347 or 0.72% of the unit price with buy, rent, rent.
The saving is solely due to the negative gearing tax savings effect. The mortgage interest, maintenance and depreciation deductions are tax deductible when investing, but cannot be deducted when living in the unit. Without negative gearing there would be no tax savings and the first home buyer would not consider such a convoluted strategy.
From the calculations, we can also see that the bigger the negative gearing tax savings, the better it is to buy, rent, rent. Buying homes with lower rent, higher maintenance costs and higher depreciation allowances (eg. new developments) and being at a higher marginal tax rate increases the incentives to do so. There is also little incentive to pay off principal in the unit as the negative gearing strategy may be done almost perpetually and any savings invested (or spent) elsewhere.
On the other hand, once the property is positively geared (when net rent exceeds cost of ownership) it no longer becomes cheaper than to buy and live. This can happen if the buyer chooses to pay off the mortgage, earns increased rent or reduces maintenance and depreciation deductions.
When it comes to selling, there may be capital gains tax on the rental property although your own home is capital gains tax exempt. Non-financial factors are that the home buyer may have a preference to live in their own home rather than to rent, despite the buy, rent, rent savings. This may be from the greater flexibility to customise your own home or not having to deal with real estate agents.
Of course, in the example renting still remains the cheapest option, though if home ownership is the goal then with the perversion of negative gearing, buy, rent, rent remains a cost effective choice.
The above scenario is just one of the many ways that negative gearing distorts housing decisions. Those on high marginal tax rates (i.e. high income earners) have incentive to invest in multiple homes. This leads to incentives to borrow excessively to invest as the negative gearing tax savings effectively reduces the ownership costs to investors compared with home owners.
Furthermore this pushes housing prices up due to the increased demand from negative gearing. Compare this to a home owner who requires only one home and is restricted in the amount that they may borrow as they do not earn rent on the home as income.
Another effect is that new homes which tend to be of higher quality are more desirable to investors as they tend to have higher maintenance costs and depreciation deductions which increases tax savings. Home owners on the other other hand are unable to deduct such costs thereby making ownership of new homes more costly than to investors.
The sooner that negative gearing is removed, the quicker simple buying and living can be the norm.
This article is for educational purposes only and does not constitute financial or taxation advice.
Adrian Lee is senior lecturer in Finance, University of Technology Sydney and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/adrian-lee-94688" target="_blank">here</a>.
 
</body></html>

Buy, rent, or do both: the perversion of negative gearing

<html><body>
GUEST OBSERVER
Contrary to what’s been broadly reported over the last few years, Melbourne’s over-supply concerns are not contained to its well documented CBD apartment market. Our supply heat map illustrates that almost the entire fifteen kilometre Melbourne ring has excess supply in the pipeline.
For the ten (10) year period to the end of 2011, there were 35,226 new dwellings approved in Greater-Melbourne each year. Greater-Melbourne building approvals (housing supply) for the last two financial years is averaging 53,690 dwellings per annum.
Greater-Melbourne’s population has grown by 182,538 people over the last two years [ABS]. This equates to underlining housing demand of 70,207 dwellings, or 35,103 per annum. Basic mathematics suggests that the current housing supply-demand pipeline has a surplus of 37,174 dwellings. If every approved dwelling was constructed this is a big enough surplus to accommodate an entire city the size of Ballarat.
<a href="/images/2016/04/20/A_Melbourne_Supply_HeatMap-watermark.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/04/20/A_Melbourne_Supply_HeatMap-watermark.jpg" alt="">
There has been a distinct trend towards more apartments, with attached dwellings representing fifty-six per cent (56 percent) of all building approvals over the last four (4) years, up from the thirty-five per cent (35 percent) ten year average. 
Melbourne City is on track to approving 19,000 CBD apartments over the last three years; this is an increase of 158 percent on the annual average from the previous five years. The Melbourne LGA population growth is just shy of 6,000 people per annum and equates to demand for 3,000 extra dwellings compared to the recent average annual supply of 6,300 CBD dwellings. Houston, we have a (big) problem!
Sixteen (16) out of Greater-Melbourne’s thirty-one (31) LGA’s have approved more than fifty percent more dwellings than normal, even though Melbourne’s population growth rate has remained relatively the same.
Recent average annual rates of supply have more than doubled the long-term average in the LGA’s of Darebin, Glen Eira, Manningham, Maribyrnong, Stonnington and Yarra. And, between 50 percent and 100 percent increases in building approvals are unfolding in the LGA’s of Banyule, Bayside, Boroondara, Greater-Dandenong, Hume, Knox, Maroondah, Moonee Valley, Moreland and Port Phillip.
<a href="/images/2016/04/27/Screen%20Shot%202016-04-27%20at%209.29.26%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/04/27/Screen%20Shot%202016-04-27%20at%209.29.26%20AM.png" alt="">
Simon Pressley is Managing Director of Propertyology, a REIA Hall Of Fame Inductee, property market analyst, accredited property investment adviser, and Buyer’s Agent. <a href="https://www.propertyology.com.au/more-than-a-buyers-agent/" target="_blank">Propertyology works exclusively with property investors</a> to purchase properties in strategically chosen locations all over Australia.
</body></html>

Residential Market

Editor's Picks

Have something to contribute?

Developments

New apartments

New townhouses

News

Residential Market

Editor's Picks

Receive the latest news stories to your inbox

Have something to contribute?

Developments

New apartments

New townhouses

News