Article summary

<ul data-end="785" data-start="311">
	<li data-end="459" data-section-id="5hbcyr" data-start="311">Pikos Group has released the five-penthouse collection at Skye Kangaroo Point, headlined by a two-storey sky home spanning more than 1,000 sqm.</li>
	<li data-end="561" data-section-id="1p7lq8n" data-start="460">Early buyer interest suggests the residences could set a new Queensland apartment price record.</li>
	<li data-end="667" data-section-id="1y70z0l" data-start="562">The collection includes four move-in ready penthouses and the highly customised Skye One residence.</li>
	<li data-end="785" data-section-id="yvm0y1" data-start="668">The release caps one of Bri​sbane's most ambitious luxury apartment developments overlooking the Brisbane River.</li>
</ul>

<hr data-end="790" data-start="787" />
Pikos Group has released the five-penthouse collection at its <a href="https://www.apartments.com.au/buildings/skye-residences-by-pikos-kangaroo-point-8-river-terrace-kangaroo-point-qld-4169">Skye by Pikos</a> development in Kangaroo Point, with early buyer interest indicating the flagship residences could eclipse every apartment sale previously recorded in Queensland.

The collection crowns the luxury riverfront development with five residences, including four completed penthouses and Skye One, a two-level sky home spanning more than 1,000 sqm that will be tailored to its eventual owner.

[smartcode_project:default project_id=90059 project_image_fid=374075]

Wanting to offer a fully customisable home, Pikos is offering Skye One as a blank canvas, allowing the buyer to work alongside the developer's design team to customise the home's layout, finishes and internal spaces.

The residence will feature a 247 sqm private rooftop terrace with its own swimming pool, sauna, steam room, outdoor kitchen and multiple entertaining areas overlooking the Brisbane River and CBD skyline.

The remaining four penthouses have been completed and are ready for immediate occupation, each offering four bedrooms, expansive open-plan living areas, soaring ceilings and private lift access.

[smartcode_project:default project_id=90059 project_image_fid=374059]

One of the defining features throughout the project is its use of Roman Classic Travertine, with more than 20,000 sqm of the natural stone imported from Italy after being personally selected by Pikos Group Founder and Executive Director Pedro Pikos, interior designer Julie Williamson and third-generation stone specialist Mario Caucci.

Pikos said the penthouse collection represented the culmination of the company's long-term vision for Skye.

"True legacy isn't measured by what we build today, but by what endures tomorrow," Pikos said.

"Our ambition is to create places that become more valuable with time, enrich the lives of generations, and stand as timeless landmarks long after we've stepped away."

[smartcode_project:default project_id=90059 project_image_fid=374060]

Williamson said the interiors were inspired by the natural character of Kangaroo Point and the Brisbane River rather than international design trends.

"Materiality tells the story of a place," Williamson said.

"We looked to the movement of the Brisbane River, the texture of the cliff face and the warmth of the surrounding landscape to create interiors that feel understated, enduring and unmistakably Brisbane."

Positioned above the Kangaroo Point cliffs, Skye places residents within walking distance of Howard Smith Wharves, South Bank and James Street while offering uninterrupted river and city views.

[smartcode_project_cta:default project_id=90059]

Joel Robinson

Brisbane's next apartment price record? Pikos unveils Skye's exclusive penthouse collection

Article summary

<ul data-end="888" data-start="289">
	<li data-end="442" data-section-id="8tsh6o" data-start="289">DVB Projects is preparing to launch its second Gold Coast apartment development, with demolition now underway at 137 Old Burleigh Road, Broadbeach.</li>
	<li data-end="573" data-section-id="1nyxl3e" data-start="443">The 34-level tower will comprise just 49 ultra-luxury residences, including half-floor, full-floor and penthouse apartments.</li>
	<li data-end="717" data-section-id="oiyimj" data-start="574">The launch follows strong demand at DVB's nearby Sea Glass project, which is more than 50 per cent sold and currently under construction.</li>
	<li data-end="888" data-section-id="epk9o9" data-start="718">The development adds to the transformation of Old Burleigh Road, with premium beachfront apartment projects continuing to reshape the tightly held Broadbeach strip.</li>
</ul>

<a href="https://www.apartments.com.au/developers/dvb-projects">DVB Projects</a> is preparing to launch its second Gold Coast apartment development, with demolition now underway on the Broadbeach site as the Sydney developer moves closer to bringing the ultra-luxury project to market.

The 34-level tower at <a href="https://www.apartments.com.au/new-apartments/137-old-burleigh-road-broadbeach-qld-4218">137 Old Burleigh Road</a> will comprise just 49 residences, ranging from half-floor apartments through to full-floor homes and a penthouse. The launch follows the strong sales performance of DVB's nearby Sea Glass development. More than half of the apartments at Sea Glass, on the other side of Broadbeach, have been snapped up, well ahead of its late 2027 completion

<img alt="DVB Projects to commence demolition on $320m Broadbeach luxury tower" data-entity-type="file" data-entity-uuid="2944b4be-c84e-4b54-8dc1-c712e76704c0" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/E02_Exterior_Street%20Level%20Entrance.jpg?VersionId=YoNig7pRdrE3HCue7sUj78LzJteeQf3H" />

The start of demolition at 137 Old Burleigh Road signals DVB Projects’ underlying confidence in the Gold Coast’s luxury beachside apartment sector.

“We see the Gold Coast as one of the most compelling lifestyle markets in Australia, particularly at the premium end where demand continues to deepen,” said Dean Brown, Managing Director of DVB.&nbsp;

“This project has been carefully designed to respond to that demand - delivering large-format residences with a level of quality, privacy and amenity that is still relatively rare in the apartment market on the beachside."

Brown says the site itself is "exceptional."

"Old Burleigh Road is one of the most tightly held beachfront strips, and opportunities to deliver a project of this scale and calibre in this location are extremely limited.”

<img alt="DVB Projects to commence demolition on $320m Broadbeach luxury tower" data-entity-type="file" data-entity-uuid="398f377a-c037-455e-9250-0c5e0d84c35b" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/I12_FF%20Balcony.jpg?VersionId=NwOiRWGMubR1c8wthuEfggklcja7al9." />

The project will comprise 40 half-floor residences of approximately 260 sqm, alongside eight full-floor residences spanning around 524 sqm.

A single penthouse will crown the building, featuring a private pool, barbecue area, indoor gym and dedicated entertaining spaces.

Residents will have access to a resort-style suite of amenities, including a 20-metre pool with daybeds, a gymnasium, hot and cold plunge pools, a sauna, and private residents’ lounge and dining facilities.

<img alt="DVB Projects to commence demolition on $320m Broadbeach luxury tower" data-entity-type="file" data-entity-uuid="d1642bb0-9a66-4427-a022-dfc0988c6287" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/A02_Pool%20to%20View.jpg?VersionId=c0IXPyn_Gp_Kn3XCwzMrqIVkAdCEwVXP" />

Sales agent Todd Matheson, of <a href="https://www.apartments.com.au/project-marketer/pezet-matheson">Pezet Matheson</a>, which is marketing both 137 Old Burleigh Road and Sea Glass, said 137 Old Burleigh Road would address a clear gap in the market for genuine luxury products.

“There are very few opportunities on the Gold Coast where buyers can secure a residence of this size and quality in a new building,” Matheson said.

“What we’re seeing is a growing cohort of downsizers and interstate buyers who still want space - they’re not willing to compromise on living area, entertaining or finishes.

“This project has been designed with that buyer in mind. It offers the scale of a home, combined with the convenience and security of apartment living, in one of the coast’s most desirable positions.”

<img alt="DVB Projects to commence demolition on $320m Broadbeach luxury tower" data-entity-type="file" data-entity-uuid="59aae0ca-5639-4320-8aca-d0bf60f48e43" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/E01_Exterior%20Hero.jpg?VersionId=DS8Zfy2WtgUEtdfe0TEUuf1W1GfcZq8S" />

Located on a 1,156 sqm site one block from the beachfront, the development will replace an ageing walk-up building and is expected to contribute to the ongoing transformation of the Old Burleigh Road strip into one of the Gold Coast’s most prestigious residential corridors.

With the development moving into the delivery phase, 137 Old Burleigh Road is slated to hit the market later this year.

[smartcode_project_cta:default project_id=145141]

DVB Projects to launch second Broadbeach apartment tower as demolition commences

A proposal to redevelop one of North Sydney's ageing commercial buildings has taken another step forward, with plans for a 38-storey mixed-use tower adding momentum to the long-awaited transformation of the Alfred Street precinct.

Now on public exhibition through the NSW Government's Housing Delivery Authority-led State Significant Development pathway, the proposal for 271-273 Alfred Street would replace an underutilised commercial building with 95 apartments, ground-floor retail, commercial space and affordable housing. The proposal was submitted by&nbsp;Tara Shore Pty Ltd, acting for the John Taylor Family Trust.

While the project will deliver much-needed housing on the southern edge of the North Sydney CBD, it also represents another piece of a broader precinct that has spent years in planning limbo.

<img alt="First look: New public domain vision underpins 95-apartment North Sydney tower on Alfred Street" data-entity-type="file" data-entity-uuid="7e1ce1b4-38df-48ab-992f-386814d86308" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Alfred%20St%20da%20podium.png?VersionId=sC_h6w.A9VEoB98qsqowPlIoz__sBZBt" />

Despite its proximity to both North Sydney Station and the Victoria Cross Metro, redevelopment of Alfred Street has progressed slowly over the past decade as broader planning controls, zoning and building heights remained unresolved. The introduction of the Housing Delivery Authority pathway has provided a new avenue for projects to progress, allowing rezoning and development assessment to occur concurrently and unlocking sites that have long been earmarked for renewal.

Designed by Office of Cortese &amp; Gilder, the proposal seeks to do more than replace an ageing office building. The architects have positioned the project as the first stage of a wider public domain vision that would improve pedestrian connectivity and create a more cohesive mixed-use precinct as neighbouring sites are redeveloped over time.

The proposal includes a widened Alfred Street setback, new street trees, landscaping and outdoor seating, along with a landscaped through-site pedestrian link connecting Alfred Street with Little Alfred Street. The connection is intended to become the first section of a future east-west pedestrian network extending across the precinct.

<img alt="First look: New public domain vision underpins 95-apartment North Sydney tower on Alfred Street" data-entity-type="file" data-entity-uuid="8ea39ac3-46ad-4562-b4a0-b862e91c2dda" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Alfred%20St%20da%20site.png?VersionId=K7umCd21KpetEFuVfsPlnJKhUOsmTTdV" />

The mixed-use tower would comprise retail space at ground level, commercial uses on level two and apartments from level three upwards.

In total, the development would deliver 95 apartments, including nine one-bedroom, 28 two-bedroom, 56 three-bedroom and two four-bedroom residences. Twenty-one apartments, representing 15 per cent of the residential gross floor area, would be secured as affordable housing and managed by a registered community housing provider for at least 15 years.

Nine basement levels would provide 133 resident car spaces, seven motorcycle spaces and 111 bicycle spaces.

According to the Architecture and Urban Design Report, the public domain strategy is designed to transform what is currently an inward-facing commercial edge into a more active and connected pedestrian environment, creating a stronger relationship between the commercial core and surrounding residential neighbourhoods.

Office of Cortese &amp; Gilder has also prepared a broader public domain framework spanning neighbouring properties between 263 and 283 Alfred Street, arguing that a coordinated approach to redevelopment will deliver better public spaces, improved tower separation and a more connected streetscape as the precinct evolves.

The proposal comes at a time where North Sydney is slated for future residential growth. Commercial developer FiveX has residential plans for the neighbouring site at 275 Alfred Street. They've proposed a 39-storey mixed-use tower with 184 apartments, while Freecity was recently approved for nearly 300 apartments across a 51-storey building on Walker Street.

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/first-look-freecity-gets-green-light-for-mixed-use-apartment-and-hotel-tower-in-north-sydney">First look: Freecity gets green light for mixed-use apartment and hotel tower in North Sydney</a>

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/first-look-fivex-plans-39-storey-residential-tower-in-booming-north-sydney">First look: Fivex plans 39-storey residential tower in booming North Sydney</a>

&nbsp;

Alfred Street the latest North Sydney pocket to be transformed by residential development

Buyers considering a residence at boutique Gordon townhouse development <a href="https://www.apartments.com.au/new-townhouses/lume-gordon-43-47-dumaresq-street-gordon-nsw-2072">Lume</a>&nbsp;now have another reason to bring forward their decision.

For a limited time, purchasers of a residence at Lume will receive a BMW iX3 50 electric SUV, valued at more than $120,000, as part of their purchase. The offer is designed to add value for buyers while complementing the lifestyle envisioned for the architecturally designed Upper North Shore development.

Scott Timmins, Development Manager at <a href="https://www.apartments.com.au/developers/winim">WINIM</a>, said the partnership was created to provide buyers with a compelling reason to act.

"In today's market, buyers need a compelling reason to act now, and the BMW partnership was designed to create that catalyst. We wanted to add genuine value for our future purchasers. Choosing the all-electric BMW iX3 50 also reflects the values behind LUME, forward-thinking design, innovation and a more sustainable way of living. It's a premium incentive that complements the lifestyle our buyers aspire to and rewards those who commit early."

[smartcode_project:default project_id=7354 project_image_fid=374893]

Delivered by WINIM in partnership with Burtonwood Investment Partners, Lume comprises 14 architecturally designed two, three and four-bedroom townhomes created for families seeking the space of a freestanding house with the ease of modern, low-maintenance living.

The three-storey residences, designed by award-winning architecture practice <a href="https://www.apartments.com.au/architects/rothelowman">Rothelowman</a>, have been tailored for families and multi-generational living, featuring private internal lifts, flexible lower-level spaces, generous open-plan living and entertaining areas, media rooms, and landscaped outdoor spaces with custom outdoor kitchens.&nbsp;

Inside, engineered oak flooring, bespoke dining joinery with integrated wine fridges and backlit bars, sculptural porcelain bathrooms, Parisi freestanding baths and Astra Walker tapware create interiors that balance functionality with refined finishes.

Each townhome has been designed to combine generous internal spaces with sustainability initiatives such as EV charging infrastructure, while <a href="https://www.apartments.com.au/landscape-architect/arcadia-landscape-architecture">Arcadia</a>'s landscaped communal areas, centred around a restored creek line and native planting, encourage residents to connect with nature and spend more time outdoors.

[smartcode_project:default project_id=7354 project_image_fid=269527]

Rothelowman's Gary Tsui said the architecture was conceived to respond carefully to its Upper North Shore setting.

"Our vision was to create elegant, uplifting homes that draw on and positively contribute to the local character through meticulously considered design and an interaction with the surroundings."

The communal landscape has been designed as more than an open space between homes. Arcadia's Ben Newell and Kate Phillips said the adjoining reserve provided an opportunity to create a distinctive natural retreat for residents.

"Just as waterways carve their way through Ku-ring-gai's landscape, a raised boardwalk weaves through the reserve, connecting the homes to this tranquil oasis."

[smartcode_project:default project_id=7354 project_image_fid=374892]

Located just 300 metres from <a href="https://www.apartments.com.au/developments/gordon-nsw-2072">Gordon</a> Village and Gordon railway station, Lume offers convenient access to Sydney's CBD while placing residents close to some of the North Shore's leading schools, including Ravenswood, Pymble Ladies' College and Knox Grammar. Lane Cove National Park, Gordon Golf Club and a range of cafés and restaurants further reinforce the family-focused lifestyle on offer, with the BMW iX3 50 complementing everything from local trips around Gordon to weekend drives and city commutes.

Construction is underway with completion expected in mid-2027.

[smartcode_project_cta:default project_id=7354]

Boutique Gordon townhomes now come with a BMW iX3 50

Two apartments have sold for more than $10 million at EADE Byron Bay, setting some of the highest apartment prices ever achieved in the coastal town and underlining the growing appetite for luxury beachfront apartments in Australia's most popular coastal locations.

The $210 million project by Vitale Property Group has now secured more than $70 million in sales, led by residences that changed hands for $12.75 million and $11.75 million.

The record-breaking transactions reinforce the shift occurring in Byron Bay's premium property market, where affluent downsizers and lifestyle buyers are increasingly opting for high-end apartments over large beachfront homes.

<a href="https://www.apartments.com.au/new-apartments/eade-byron-bay-29-shirley-street-byron-bay-nsw-2481">EADE Byron Bay</a> occupies a rare 6,000 sqm absolute beachfront site on the corner of Shirley and Milton Streets overlooking Main Beach and The Wreck surf break, just 350 metres from Byron Bay's town centre.

The 25-residence development is the first beachfront apartment project approved in Byron Bay in more than a decade and is currently under construction, with completion expected in May 2027.

[smartcode_project:default project_id=145590 project_image_fid=359521]

The project has attracted a mix of local Byron Shire residents downsizing from larger homes, alongside interstate buyers from Sydney, Melbourne and Brisbane seeking a permanent coastal lifestyle without compromising on space.

Designed by <a href="https://www.apartments.com.au/architects/hayball">Hayball</a> and with interiors by <a href="https://www.apartments.com.au/interior-designers/alexander-co">Alexander &amp; Co</a>, EADE comprises&nbsp;10 garden apartments ranging from 284 sqm to 622 sqm, nine with private pools, five full-floor apartments and 10 rooftop residences with private plunge pools, expansive outdoor entertaining areas and uninterrupted ocean views.

[smartcode_project:default project_id=145590 project_image_fid=359527]

<a href="https://www.apartments.com.au/developers/vitale-property-group">Vitale Property Group</a> Managing Partner Chris Vitale said the project's combination of scale, location and limited future supply was driving buyer demand.

"There isn't another beachfront holding in Byron Bay of this size and position that could be developed again," Vitale said.

"Buyers are responding to the scarcity and the irreplaceability of a site of this calibre and to floorplans they can't find elsewhere in the market.

"We are seeing buyers place significant value on quality, space, design, resort-style amenities and the rarity of the location. The sales achieved to date demonstrate that discerning purchasers recognise the long-term significance of what is being created at EADE Byron Bay.

"Many are coming from larger homes in the Byron region, or from Sydney, Melbourne and Brisbane, and are after the space, security and convenience, without the upkeep of a house."

&nbsp;

[smartcode_project:default project_id=145590 project_image_fid=359523]

The Byron Bay project follows Vitale Property Group's delivery of the Mondrian Hotel and Private Residences at Burleigh Heads, with EADE continuing the developer's focus on luxury coastal developments.

Residents will have access to a resort-style swimming pool, gymnasium, sauna, cold plunge pool, concierge services and dedicated workspaces, while the project is targeting an 8-Star Green Star rating.

EADE Byron Bay is being exclusively marketed by Projx Australia in conjunction with WHITEFOX Projects.

WHITEFOX National Projects Director Phillip Rand said demand had been driven predominantly by owner-occupiers.

"We are seeing buyers at EADE place significant value on quality, space, design, resort-style amenities and the rarity of this location," Rand says.

"The sales achieved to date demonstrate that purchasers at this level recognise the long-term significance of what is being created at EADE Byron Bay."

Residences at EADE Byron Bay are currently priced between $4.75 million and $15.95 million.

&nbsp;

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[smartcode_project_cta:default project_id=145590]

Vitale breaks Byron Bay records with EADE sales flurry 

Simon Pressley

<html><body>
GUEST OBSERVATION
Why have South East Queensland (SEQ) property markets been attracting such an increasing amount of positive press over the last year or so?
Every Tom, Dick and Harry seems to have an opinion, however few people can actually articulate any meaningful comment on what is likely to drive SEQ markets.
About a year ago, a couple people with high profiles made a comment along the lines of ‘Sydney and Melbourne markets have already moved so Brisbane must be next’. Such gibberish implies that markets perform like well-behaved children who take it in turns playing with their toys.
Other headline chasers try to sound intelligent by quoting generic stats such as changes in median property values, auction clearance rates, or people attending open homes and want to pass it off as ‘quality research’. Yawn!
People, especially investor, follow like sheep. Media momentum builds and, suddenly, a growing percentage of property investors are thinking ‘all roads point to Brisbane, Logan, Ipswich, or Deception Bay’.
Comforted by the fact that everyone appears to be saying the same thing, investors all around country have felt that they’re on a winner and have set about finding an expert with local knowledge to help them secure their own piece of south-east Queensland ‘gold bullion’.
The Propertyology team certainly isn’t going to reject the increased level of new business enquiry from this herd mentality. And, while we do think that parts of south-east Queensland have a healthy outlook, investors are often shocked when we remark that we feel that we can make their investment dollar work harder in locations outside of SEQ - interstate and other parts of Queensland. Be the shepherd, not a sheep!
Much of the rhetoric which gets reported on property markets relates to matters affecting housing demand. I recently conducted a keynote presentation at the Australian Property Institute Conference and discussed why housing supply and sentiment play an equally important role in fluctuations of property prices.
Since the turn of the century, equilibrium was maintained between Queensland dwelling construction levels (supply) and demand (population growth).
<img src="/images/2014/12/15/pressey%20dec%2015%20one.jpg" alt="">
<table style="width: 460px;" border="1" cellspacing="0" cellpadding="0"><tbody>
<tr>
<td valign="top" width="160">
Population Growth
</td>
<td valign="top" width="141">
2003-2013
(10yrs)
</td>
<td valign="top" width="119">
2008-2013
(Post-GFC)
</td>
</tr>
<tr>
<td valign="top" width="160">
Queensland
</td>
<td valign="top" width="141">
2.4%
</td>
<td valign="top" width="119">
2.1%
</td>
</tr>
<tr>
<td valign="top" width="160">
Australia
</td>
<td valign="top" width="141">
1.7%
</td>
<td valign="top" width="119">
1.8%
</td>
</tr>
</tbody></table>
Whilst Queensland’s population growth rate is still above the national average, interstate migration is not what it used to be and growth rates have eased.
With the mining construction boom winding back, governments are looking at alternative measures to stimulate the economy. Incentives have been offered for new property purchases, more land has been released, and zoning changed. Australia is now in the midst of a construction boom.
Several locations will soon have considerably more housing supply than demand requires, followed by underperforming price growth and rental returns. The battle between ‘supply’ and ‘demand’ is on. Most sheep will end up in the wrong paddock!
Simon Pressley is managing director of <a href="https://www.propertyology.com.au/" target="_blank">Propertyology</a>, a full-time property market analyst, accredited property investment adviser, and Australia’s (REIA) Buyer’s Agent of the Year (2012+2013+2014).
</body></html>

spressley-sBoeMhannA

Does South East Queensland really deserve all the attention?

<html><body>
GUEST OBSERVATION
If there is one thing that I see on a daily basis that I get frustrated with it is that decision-making is a skill which few people have learned to do very well. And this, not one's salary or profession, is the primary reason why few people achieve anywhere near as much as they are truly capable of.
When taking on important projects, a lot of people's focus is too heavily weighted on how they can complete it at the lowest cost rather than focus on the outcome that they hope to achieve.
Good decisions are made with a clear mind and with a focus on 'why' you are doing it in the first place – the long-term objective as opposed to the current task. Tapping in to the best resources you can find, including input from someone whose core business is conducive to your longer-term objective, enhances decision-making quality. Regularity of good decisions is the cornerstone to success.
Getting something done is an accomplishment. Getting something done well is an achievement! Many people can lay claim to the accomplishment of buying a property. Fewer people have truly astute investment decisions on their list of achievements.
Those whose default behaviour is to save money ahead of doing something as well as they can are destined to compromise outcomes. We've all heard that saying "you get what you pay for". The first question that people ask when making enquiries about goods or services is "what does it cost?” when it should be “how can you assist me to achieve my objective?”
The client who appoints the accountant because he/she is the cheapest will never know that there were more creative strategies which would have saved them a lot of money.
I find it amusing when people chose to take that DIY option instead of paying a specialist.
Outsourcing to specialists creates more time to do more of the things that you are truly good at, enables you to make more money, and enhances the quality of your accomplishments.
The person who uses a DIY diagnosis for that constant sneeze and keeps going back-and-forth to the chemist, might have been able to overcome it very quickly from a trip to an allergy specialist – skill comes at a cost but the net result is usually worth it. A majority of property investors are like that DIY patient who never consults a true specialist!
There are only 24 hours in the day; it's what we do with them that counts! We can all make more money if we really want to but no one can make more time. No one!
If we want to achieve the very best that we are capable of for something that is important enough to do, then I suggest that's where the focus should be most, not on the easy option or the cost.
Instead of focusing on tasks associated with buying an investment property, focus on the primary objective of increasing your potential to make the most money possible. Are you a ‘property buyer’ or a ‘property investor’?
Article continues on the next page. Please click below.
<hr class="system-pagebreak">
Seven common examples of poor decision-making made by property investors:
<ol>
<li>
Property selection Tax advantages and emotions dominate property selection decisions to the detriment of capital growth potential over the longer term. Hardly a day would go by without me hearing someone tell me that they want to buy a brand new property because of the extra tax incentives; or an attractive looking property to get a better tenant. A structurally sound established property, in a strategically chosen location, at a significantly lower entry-price has much more upside capital growth potential, whether it looks dated or beautiful. 
</li>
<li>
Building and pest inspections Why are some buyers so quick to terminate a purchase contract after an inspector discovers defects? The inspector’s job is not to comment on what they like; he / or she is only going to comment on the 1-2% of the property that might benefit from some best-practice attention. The long-term primary objective is to invest in a property in the right city, the right street, the most suitable dwelling style, and priced right. If you’ve already found that property and it happens to have several defects why would you be so keen to walk away? Good decision-making would be to explore how significant the defects are, the likely cost to fix them, and whether a deal could be done with the owner. What most see as risks, could actually be opportunities.  
</li>
<li>
House v apartment I wish I had a dollar for every time someone told me that they “don’t want to invest in an apartment because they don’t want to pay body corporate fees” or “land appreciates but buildings depreciate”. Narrow-minded statements such as these are living proof that too often people get distracted by small things which they don’t want at the expense of the real objective, the end result that they hope to achieve. The dwelling types within my own property portfolio have been strategically-chosen as a result of demographic and supply-demand research conducted within each city.  
</li>
<li>
Applying for an investment home loan The objective should be to get the most suitable type of loan, which compliments a professionally designed overall debt structure, has a strategy to deal with good debt and bad debt, and avoids cross-collateralising. In spite of this, the first question people usually ask is “what’s your interest rate?” A lot of borrowers are also creatures of habit who go back to the same bank because ‘it’s easier’. Banks are good at explaining features and benefits however their strategy skills generally leave a lot to be desired.  
</li>
<li>
Property management Property managers play an important role in helping investors to get the best out of their profit and loss statement. Why is it the first question investors ask is “what do you charge?” This is a classic example of how so many people lose sight of the primary objective - property management fees are only one line entry in the P&amp;L. When I interview property managers I enquire about office systems, staff turnover and ratios of properties to property managers. I ask questions about their processes to minimise vacancy periods and arrears, how they handle maintenance requests and I review samples of their rental advertisements. As with a majority of business decisions, it’s not so much as what a property manager charges, but what they do (or don’t do) for it.  
</li>
<li>
Organising insurance The point of having insurances is to protect ourselves from loss in the event of an unforeseen event. The focus should therefore be on what needs protecting, how much protection we need, and what the policy wording says that the insurer will / will not do in certain situations. When organising insurance, an overwhelming majority of people do little more than ring around and ask price-related questions (“what’s your premium, what’s your excess?”). How would you feel if a claim for flood or malicious damage was denied, or the payout following a major fire was insufficient to rebuild the entire house? If the insurer doesn’t come to the party at time of claim all of those insurance premiums that you’ve paid over the years are little more than a donation.  
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Rental renewals Refusing to be flexible with the amount of rent charged without even contemplating current market forces is another example of poor decision-making which is all too common amongst property investors. What is the sense in insisting on a particular rental figure at the expense of a longer vacancy period? It is irrelevant how much rent you ‘want’, or how you justify it, unless the market is prepared to pay it. Astute property investors make good decisions through understanding that there are generally three factors which determine whether or not a property is rented: price, presentation, and promotion. Every market’s vacancy rates will fluctuate up and down from time to time and sometimes the best decision is to advertise the property for 5% less than your competition.  80% of something will always be more than 100% of nothing!
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Simon Pressley is managing director of <a href="https://www.propertyology.com.au/" target="_blank">Propertyology</a>, a full-time property market analyst, accredited property investment adviser, and Australia’s (REIA) Buyer’s Agent of the Year (2012+2013+2014)
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Seven common examples of poor property investment decisions

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GUEST OBSERVATION
Negative gearing is a form of financial leverage where the gross income generated by an investment is less than the cost of owning and managing the investment, including interest charged on the borrowings.The negative cash flow is then offset against personal incomes. 
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Doesn’t negative gearing just help the rich get richer?
According to 2011-12 ATO statistics, there were 12,736,030 individual taxpayers in Australia and 1,897,668 (14.9%) of them owned one or more investment properties. 73% of property investors own one property and only 4% of investors own four or more properties. For a property to be negative geared there must be a significant debt against it (they don’t own it outright).
In other words, an overwhelming majority of investors are ordinary mums and dads; they are attempting to fund their own retirement, as opposed to being a burden on Australia’s taxation system via government-funded pension.
Doesn’t negative gearing reduce the amount of revenue available to governments each year?
A report produced by REIA in August 2014, mentioned that a total of $7,860 million in losses were claimed by Australian property investors in 2011-12. The ATO also charged extra taxes on the $5,939 million worth of investment property profits.
Should changes ever be made to negative gearing and results in fewer property transactions each year, governments would stand to lose a lot more tax revenue from stamp duties, infrastructure charges, land tax, construction industry payroll taxes, and more. The existing $71 billion (and growing) spent each year on tax-payer funded pensions and allowances will increase significantly. 
What impact would the removal of negative gearing have on Australia’s housing supply?
According to 2011 Census data, Australia has 9,117,003 residential properties and we are adding approximately 160,000 more each year. Negative gearing is a tax-policy linked to property – other policies include stamp duty, first home buyer incentives, tax rebates and incentives to purchase new property, land tax, and capital gains tax.
Tightening of any of these policies will directly influence consumer behaviour and become a disincentive to buying and holding property. As we’ve seen already with ‘new home building grants’, the introduction and removal of tax policies directly affects the construction industry (Australia’s biggest industry by direct and indirect jobs).
What about Australia’s social housing problem?
75% of residential properties in Australia are occupied by the owner. Of the remaining 25% that are rented only 5% are provided by governments. Governments can’t afford to fund social housing (some governments have actually been selling off parcels of properties in order to raise money for other reasons).
The National Rental Affordability Scheme (NRAS) is government admission of our social housing shortfall which governments can’t fund so they developed a policy designed to encourage others to do it for them. Removal of negative gearing would be a gross contradiction to this.
How might the removal of negative gearing affect Australia’s welfare system?
Australia’s financial literacy crisis is in our DNA - only 4% of people are financially independent by age 65. The federal government have said that we can't support our ageing population with our unsustainable reliance on tax-payer pensions. They have touted the possibility of the superannuation age increasing to 70. Stripping back incentives which encourage investment would only compound this country's problem.
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Does negative gearing force property prices up and make it harder for first home buyers to get in to the market?
Property markets are affected by dozens of factors. The factors which affect property values the most are related to the general economy, employment, and credit policies, not tax policies). When property markets perform strongly, like they have in Sydney in 2013-14, it is not uncommon for segments of the community to blame investors for driving values up and making bit harder for others to get in.
Negative gearing has been in place for generations and it is no more responsible for Sydney’s property price growth in 2013-14 than it was for its flat-line performance from 2001 to 2008.
Doesn’t negative gearing make rents more expensive?
In July 1985, in response to claims that negative gearing was the primary cause of property rents rising uncontrollably, the Hawke government quarantined negative gearing. During the two years that the quarantine was in place, ABS figures show rents rose by an average of 22%. The policy was reversed in 1987 and rents still rose by 21% over the next two years. A similar trend occurred with property values. As mentioned previously, tax policies have a smaller impact on property markets (values and rents) than most people think.
What other potential impacts could occur if negative gearing was tinkered with?
Propertyology often describes property investment as a business – the business of providing accommodation – and the investor’s role is akin to that of a company director (to make responsible decisions which are in the best interest of your balance sheet and profit and loss statement).
Negative gearing involves claiming interest expenses from borrowings plus other costs associated with maintaining an asset in much the same way that more traditional businesses do. Similarly, a share investor will claim the interest expense from their margin loan. Time will tell whether property investors will be singled out or not.
A final word...
Rumours of negative gearing getting scrapped arise almost every year – either in the lead up to a federal budget or whenever there is a major review of Australia’s taxation policies. It is the responsibility of governments to periodically review everything; nothing lasts forever. The reality however is that negative gearing has existed in Australia for a few generations.
In the event that negative gearing was ever scrapped, there might be some short-term referred pain but the real estate body will eventually realign itself (once the dust settles, it will be business as usual again for most property investors).  The potential implications to scrapping negative gearing will be spread a lot further than property investor’s tax returns. Any government who is bold enough to make a change faces consequences far greater than the revolt of 1.9 million people at the election box. For these reasons, it is my view that negative gearing will survive further generations.
Simon Pressley is managing director of <a href="https://www.propertyology.com.au/" target="_blank">Propertyology</a>, a full-time property market analyst, accredited property investment adviser, and Australia’s (REIA) Buyer’s Agent of the Year (2012+2013+2014)
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Scrapping negative gearing would have consequences far beyond an investor's tax return

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GUEST OBSERVATION
Rising world demand for gas, iron ore, and coal have already made a mark on several property markets across Australia over the last four to five years. Propertyology’s continuous investment in property economics has us questioning whether another commodity, nickel, might soon create other property investment opportunities.
While not as well known as other metals, nickel plays an important role in modern life. When mixed with other metals it helps create strong alloys that won't rust, can withstand high and low temperatures, and can be easily shaped into anything from thin wires to flat sheets.
One such use of nickel is adding it to iron to make stainless steel. Just ponder: with the existing western world and the fast rising Asian middle class, how much extra demand will there be for cooking utensils and kitchen equipment, surgical instruments, marine equipment, the construction industry, crank-shafts and axles in cars, washing machines, aircraft engines? What opportunities will this create for businesses with links to nickel? Where might all the new jobs be created?
Ponder this also: rising petrol prices, a push for cleaner energy and more advanced technology is expected to result in a major ramp up in production of battery-powered cars. It doesn’t require rocket science to figure out that a similar increase in production of portable devices such as smart phones and laptops is also expected to boom. Rechargeable batteries for mobile phones, cars, clocks, kid’s toys, and remote controls require nickel.
Get the picture? Now ponder this...
Australia is currently the world’s fourth largest producer (11.4%) of nickel, behind Russia, Indonesia and Philippines. If world demand for nickel intensifies as forecast, it might become even more prevalent that Australia is ranked number one in the world for nickel resources with 24.4% of known reserves.
Stock market analysts, Credit Suisse, recently placed a couple of Australian-based nickel mining companies on their ‘watch list’. Western Australia (refer Kalgoorlie) has the lion’s share of nickel resources. Other less significant resources are located in the central west of New South Wales, far northern tip of Tasmania, south of Gladstone and near Townsville. Property investors might consider placing a couple of these locations on their watch list, too.
<img src="/images/2014/08/12/nikel-deposits-aug-12-one.jpg" alt="">
Source: Geoscience Australia, '<a href="/news">Australia's Identified Mineral Resources 2013</a>'.
Buying an investment property in a remote location because of the potential for a single mine is something that Propertyology would consider to be very speculative. However, when we combine economic sustainability with some future upside we often get a really astute investment decision which stands out from the rest of the pack.
Sometimes the best investment results over the longer-term come from buying in the towns nearby to the mines, although an understanding of the higher volatility from commodity price fluctuations is important. In different situations the wisest investment might be in the large city (capital or regional) which will supply most of the goods and services to the smaller towns.
Perth, for example, has one of only two existing major nickel refineries in Australia. The BHP-owned Nickel West refinery at <a href="/news">Kwinana</a> processes most of Western Australia’s nickel and you’d have to think that there is considerable potential to increase upon its current 2,000 employees.
QCG Resources has just acquired the Avebury nickel mine in Tasmania for $40 million. The mine closed in 2009 due to floundering nickel prices. Due to the aforementioned rising demand for nickel, the commodity price has increased by a significant 34% since Christmas and QCG clearly see an encouraging outlook for nickel.
Clive Palmer will be as excited as anyone about the forecast demand for nickel. He may be controversial, however he didn’t become a billionaire by chance. Palmer owns the Queensland Nickel Refinery in <a href="/news">Townsville</a>. Queensland Nickel imports the commodity from mines in the Pacific, processes it, and then exports it out as a refined product. Whilst nothing has materialised as yet, Palmer has proposed a $1 billion upgrade of the refinery and supporting infrastructure. If that goes ahead there will be significantly more than the existing 1,000 people employed at the Townsville refinery. Townsville already has a lot to offer for property investors.
Palmer is also the major shareholder of Gladstone Pacific Nickel Limited (GPNL) which has proposed the establishment of a $3.5 billion nickel and cobalt refinery adjacent to the existing deepwater Port of Gladstone. GPNL already owns a nickel mine at <a href="/news">Marlborough</a>, near Gladstone. In spite of Gladstone’s current property market downturn, population growth forecasts are very strong and the surplus property stock will be soaked up before too long in Australia’s industrial powerhouse.
The future outlook may well be one of those ‘upside’ factors for Gladstone and Townsville – both are very strong regional cities with incredibly strong long-term property investment fundamentals. 
<img src="/images/2014/08/11/press-aug-11-one.jpg" alt="">
Simon Pressley is managing director of <a href="https://www.propertyology.com.au/" target="_blank">Propertyology</a>, a full-time property market analyst, accredited property investment adviser, and Australia’s (REIA) Buyer’s Agent of the Year (2012+2013+2014).
Picture courtesy of Wikimedia Commons.
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Nickel could be behind the next mining boom: Here are the areas set to benefit

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GUEST OBSERVATION
Understanding the chain which leads to future property supply is an important consideration before deciding to invest in to a market.
Forecasting future property supply is arguably the single most difficult task for property analysts.
Analytically-minded property investors enjoy statistics. While statistics do play an important role for property analysts, some statistics have greater relevance than others. And then there's the skill in being able to interpret statistics. Building approval statistics play an important role in understanding property markets.
Building approvals are a lead indicator for future property supply. ‘Approved’ does not mean ‘built’. The property supply chain is such that lot owners must (first) apply to the local government authority and have the application approved, (then) secure the necessary funding, and (finally) begin construction. The time lag from building approval through to completion of construction often ranges from six months to two years.
Building approval statistics are relevant for property investors because they have a direct impact on that relationship between demand and supply.
<img src="/images/2014/07/16/building%20approvals.jpg" alt=""> 
Generally speaking, when there are a large number of buyers (demand) at a time when the levels of supply are low, increased competition is created; price growth then occurs. Conversely, when supply is high buyers have more choice and prices are discounted.
A lot of property investors don't understand the lag affect that building approvals have on property values. An investor might purchase in to a market a buoyant market and neglect to study the supply chain. Supply might be tight at the time of purchase however there might also be a large volume of new properties literally 'on the drawing board' and slated for construction completion in the near future. A much softer market might be just around the corner.
Take a look at Western Australia's building approval graph (remembering that 75% of WA's population is based in Perth). The volume of building approvals eased during 2010 and 2011. The lag affect of the declining number of new properties coming on to the market was one significant reason why Perth experienced above-average price growth in 2012 and 2013.
A significant rise in building approvals in Perth during 2013 means that a lot more supply is hitting the market this year.
Property developers will always find a way to build (their livelihood demands on it). A healthy construction industry generally means a healthy economy however there will always be a fine line to building too much. And statistics will only enable us to look so far in to the future.
Forecasting future property supply is arguably the single most difficult task for property analysts.
Simon Pressley is managing director of <a href="https://www.propertyology.com.au/" target="_blank">Propertyology</a>, a full-time property market analyst, accredited property investment adviser, and Australia’s (REIA) Buyer’s Agent of the Year (2012+2013+2014).
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The property supply chain: The effect of building approvals on property values

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GUEST OBSERVATION
I'm so angry!
It is the property market equivalent of Storm Financial just waiting to implode and no one seems prepared to do a damn thing about it. I am one of a handful of people who have been proactive in lobbying for new legislation to protect property investors from vested interest groups for some years. Yet we keep seeing deals being done between property developers and white-collar service providers.
Currently, there is no law in this country which prevents people such as mortgage brokers, accountants, and financial planners from profiting out of persuading consumers to purchase a property from a product list, even though they have no qualifications or skills whatsoever in this field.
Just this week, a home loan group announced that they will offer “independently graded and valued” property.
“Independently graded” means “product which one gets a good kick-back through the strategic use of smoke and mirrors”.
They said that their scheme would reassure customers that the properties hadn’t been overpriced to account for massively inflated sales commissions. They were referring to some groups, including mortgage brokers, who are reportedly receiving up to 8% of a property sale price as a rebate from developer’s marketing arms.
How wonderfully comforting that is. Not!
The price of an asset being supported by a valuation report does not determine whether or not the asset has strong investment fundamentals and a healthy outlook. It disgusts me when people try to portray a white-knight status with a north-pointing moral compass when the truth of the matter is that greed and opportunity are the real behaviour drivers.
They said that they're providing a range of investments that can be confidently offered to their clients... but what's to stop them from offering clients opportunities to buy shares in the next ABC Learning or HIH Insurance?
The reality is that, unless studying property markets is your core business, I’d suggest that you’d know as much about what constitutes a good investment property as my mechanic would about stock markets. But, at least my accountant is giving stock tips and getting a clip on the ticket from the ASX.
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The federal and state governments are whom I’m most angry with over this disgraceful fiasco.
Amongst other things, I’ve personally met separately with senior officials of the federal government’s financial services ‘police’ (aka ASIC) and the Queensland state government’s Attorney General’s Office. Responses that I have received range from “we can’t intervene because property isn’t considered to be a financial instrument”, to “we must be careful not to deprive people of earning a living”, and “we are looking in to it”.
It is not uncommon for my office to receive approaches from marketing companies who represent property developers and offer us in the vicinity of $50,000 per property. They are dud investments. These companies offer to supply us with all the glossy brochures, website portals, and all of the jazz words and crappy stats which they purport to be ‘research’. Regardless of where the property is located, who the developer is, or whatever spin they use, the common denominator is always brand new property. Always!
How else can those big fat rebates payable to brokers, accountants, and financial planners get funded?
No matter what spin they choose to use they are selling property. Let’s face it, in many cases it wouldn’t be too hard for them to persuade someone to buy one of the properties on their product list because the relationship and a sense of trust is already established as a result of their core business as a specialist in home loans, tax, or managed funds. Is it just me, or can anyone else see a problem with these people selling property?
For over a century there has been a recognised profession for selling property in Australia – they are called real estate agents. The law requires them to pass exams, acquire a license, hold professional indemnity insurance, complete ongoing training, understand and respect property legislation. They also work for and are paid by the property owner, and most do a good job for their client. But, how is it possible that others can exploit a pre-existing relationship from another profession and sell property with nothing more than a nod and a wink?
If they want to sell real estate, go for it. Get the license and put the sign out the front. But present yourself for what you are – someone selling property – not a property guru who very conveniently happens to have a list the best investment properties out of the 9.3 million in Australia.
An accountant is no more qualified to determine whether property ‘x’ is a good investment than a real estate agent is qualified to give tax advice. Mortgage brokers and financial planners are not property investment advisors. And, a glossy brochure containing a few graphs, some generic statistics from Census, and key words such as ‘urban renewal’ or ‘inner city’ does not constitute comprehensive market research.
It is unrealistic to expect that we will ever be rid of the white-shoe-brigade property spruiker. But, in my opinion, the people whose core business is another profession while they line their pockets pretending to be property gurus are worse than the spruikers. Their greed-driven behaviour is no better than the used car salesman who sells you a lemon that he knows has a broken chassis. At best, these people are ‘reckless distributors’ of properties with low-grade investment potential.
No matter what other services they have previously obtained from a firm, property investors would be wise to question the motives of their so-called ‘trusted advisor’. Property investors would do well to question why not one of the other 9.3 million properties in this country.
Property investors would do well to consider how a brand new property could have the best potential for capital growth when 40% of the price is made up of the various taxes associated with developing a new property.
Simon Pressley is managing director of <a href="https://www.propertyology.com.au/" target="_blank">Propertyology</a>, a full-time property market analyst, accredited property investment adviser, and Australia’s (REIA) Buyer’s Agent of the Year (2012+2013+2014).
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Think property spruikers are bad? How about these guys

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GUEST OBSERVATION
The performance of Sydney’s property market over the past 12-18 months is as concerning as it is spectacular.
Double-digit price growth isn’t consistent with Sydney’s property market fundamentals. While I’ll stop short of predicting that a downturn is on the horizon, the drivers of Sydney’s market are as fragile as a house of cards. With over 9.3 million properties to choose from in this country, one begs the question, “Why Sydney?”
First, The Fundamentals
Contrary to tabloid rhetoric, Australia is not having a property boom. Outside of Sydney, property markets are experiencing a predictable post-GFC recovery phase with normal rates of growth (0 to 6%) over the past 12 months.
The state of New South Wales is home to 7.4 million people (a third of Australia’s total population) and 4.3 million (18.7%) of these are in Sydney
Greater Sydney can be broken in to ‘Metropolitan’ and ‘Western Sydney’. With a population of 2.06 million people (8.9% of Australia), Western Sydney on its own is bigger than the combined populations of South Australia, Tasmania, ACT, and Northern Territory.
 <img src="/images/2014/06/10/pressley%20june%2010%20one.png" alt="">
With a median house price of $802,000 Sydney is the least affordable location in Australia (miles above the capital city average of $580,000).
For the same price that you can buy a Sydney apartment (median value $576,000) you can buy a house in every other location in Australia with the exception of Melbourne.
Sydney’s population growth rate has been below the national average over the past 10 years, and only ahead of economic minnows South Australia and Hobart. Rate of growth is completely different to size.
 <img src="/images/2014/06/10/pressley%20june%2010%20two.jpg" alt="">
New South Wales has a long history of people immigrating away from Sydney to alternative locations
 <img src="/images/2014/06/10/pressley%20june%2010%20three.png" alt="">
Sydney has been Australia's worst performing capital city market since the 2000 Olympic Games (it’s not a typo).
<img src="/images/2014/06/10/pressley%20june%2010%20four.jpg" alt="">
Through 2000 to 2010, the NSW unemployment rate was regularly above the national average. After finding its way back to parity it improved further to fall below the national average this January and currently sits 0.5% below. It is no coincidence that Sydney’s property market has improved with its employment record.
Metropolitan Sydney is Australia’s white-collar capital and unemployment rates are currently up to 50% better than the national average. It’s just a shame that few people can afford to buy a metropolitan home.
Large parts of Western Sydney, on the other hand, have significantly fewer job opportunities. Manufacturing accounts for 16% of jobs (not ideal with a high Australian dollar) while a fifth of all businesses are in the construction industry. Australia’s highest crime rates are in western Sydney
 <img src="/images/2014/06/10/pressley%20june%2010%20five.png" alt="">
To overcome a reported 182,000 job shortfall, tens of thousands of people have to commute from the more affordable western suburbs to work in metro Sydney each day.
Transport infrastructure has not kept pace with population growth. The rail network has not been significantly expanded since the 1930s, yet the region’s population is now five times greater. The heavy reliance on passenger cars results in horrendous traffic congestion, loss of productivity, and high fuel costs. Remember that earlier Interstate Immigration graph?
15 years of babble about Sydney having run out of land and therefore having an under-supplied property market is not totally correct. Metro Sydney’s land shortage has been compensated by higher density construction while sprawl has occurred to the west. Overall, dwelling construction was greater than required until the GFC handbrake was applied. The tightening of supply is another reason for the more recent pressure on Sydney property prices.
 <img src="/images/2014/06/10/pressley%20june%2010%20six.png" alt="">
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The Foreign Investor Phenomena
Structural changes resulting from the revolution known as the ‘Asian Century’ has directly resulted in unprecedented volumes of properties being purchased in Australia by Asian investors.
With Sydney and Melbourne having Australia’s biggest profiles internationally, they have been the centre of attention for the construction industry’s marketing teams.
In a majority of cases, Asian investors are buying brand new properties – only Australian residents are permitted to buy established properties.
According to the latest report from Australia’s Foreign Investment Review Board (FIRB), there were 12,647 applications approved in the 2012-13 financial year. A total of 12,025 of these approvals were for Australian real estate transactions (289 were for mining).
The number of FIRB approvals for Australian (residential) real estate has grown from 3,723 in 1999-10 to 11,668 in 2012-13. I’d be staggered if the numbers aren’t even bigger this year. The tsunami is coming! Victoria (38%) and NSW (30%) account for the lion share.
<img src="/images/2014/06/10/pressley%20june%2010%20seven.jpg" alt="">
The House Of Cards Concern
While I think that Sydney’s employment will follow current trends, its property market will ease (refer lack of affordability and a significant supply of new dwelling stock in the pipeline).
 <img src="/images/2014/06/10/pressley%20june%2010%20eight.png" alt="">
An unhealthily high ratio of investor-owned properties is already occurring with recent ABS data confirming that 53% of NSW home loan approvals (refer Sydney) were for investors. Melbourne is concerning high at 45%, 30% is about normal. Yields will reduce!
In light of the fundamentals outlined, the only thing that can sustain Sydney’s market strength is continued high rates of Asian investment. This is where there are two jokers in the pack which I feel make Sydney’s house-of-cards very fragile.
With the boom being isolated to Sydney and pressure still on the Australian dollar, the Reserve Bank is unlikely to pull the trigger on a few interest rate rises as they would normally do. But, what if the FIRB passed legislation to restrict Asian investment in Australian real estate? Joker number one!
The other possibility lies in China. There are recent reports of China’s residential market declining by 15% over the last 12 months. Chinese banking executives and economists say that a severe housing downturn could cause a considerable increase in non-performing loans at the country’s banks. We know that when times get tough investment properties are often one of the first assets disposed of in order to bring the household budget back in to order. Further instability in China’s market could result in high levels of resale stock in Sydney. Joker number two!
In so far as a medium term outlook, my money is on Sydney performing similar to the last 15 years – below the Australian average.
Simon Pressley is managing director of <a href="https://www.propertyology.com.au/" target="_blank">Propertyology</a>, a full-time property market analyst, accredited property investment adviser, and REIA / REIQ Buyer’s Agent of the Year (2012, 2013, 2014).
Photo courtesy of Peter Roberts/Flickr/<a href="https://creativecommons.org/licenses/by/2.0/" target="_blank">Creative Commons</a>.
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Sydney’s property market is a house of cards

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GUEST OBSERVATION
Have we all recovered from this week's news that our homes fell in value by $10,355 last month?
According to RP Data, the typical $545,000 Australian property declined by 1.9% last month. And, it gets worse if you live in Melbourne where homes fell $19,980 (3.6%) during May. In just one month!
But, don't worry; anyone who is keen to make up for their loss in a hurry might buy in Darwin where a typical property grew in value by a whopping $30,800 (5.5%) over the last three months. 
It’s nice to know that yesterday’s RP Data statistics confirmed for us all that Australia is officially having a property boom. The combined value of properties across all capital cities has climbed by an impressive 10.7% over the last 12 months. With the extra $58,315 added to everyone’s balance sheet over the last year perhaps we can now all afford to cut back to a three day working week.
Confused?
Did we lose $10,355 last month, or did we gain $58,315 over the past year? Answer: none of the above!
As they say in the media though: “If it bleeds, it reads”.
According to Monday's RP Data, the 1.9% fall during May is the <a href="/expert-insights/finance/last-months-price-growth-dip-the-first-since-may-2013-so-rba-will-be-content">first monthly fall in values since May 2013 and the biggest fall since December 2008</a>.
On an annualised basis, the typical Australian home declined by 22.8%. Almost a quarter of the value of Australia's 9.3 million residential properties was wiped off the market last month.
Quick, I better sell that farm!
Changes in median values often don’t provide an accurate reflection of actual changes in property values. It’s not like RP Data sends out an army of property valuers each month to conduct formal values on every property in the country.
Median values are based on those properties which sold during a particular period (that’s a very small sample of data within a community). Given that a typical new property is worth more than a typical established property, it makes sense that, if there were a lot of new properties sold in one market over a reporting period that the median value would be higher.
A lot of new properties sold have sold in places like Sydney and Melbourne recently, <a href="/expert-insights/investing/the-shifting-dynamics-of-the-current-buyer-demographic">especially to investors of Asian origin</a>.
Trends in median property value changes are an unreliable measure of how a market is really performing.
As for what is really happening across the country, Sydney’s market appears to be tapering after a 12 month strong run.
The remaining capital cities, including Melbourne, have experienced price growth of between 0% and 6% over the past year.
Broadly speaking, Australia has finally shaken off the post-GFC gitters and entered in to a new (upswing) cycle.
As for the next year or two, PROPERTYOLOGY believes that most capital cities will perform better than last year.
But don't necessarily rely on reading that through future changes in median values.
Simon Pressley is managing director of <a href="https://www.propertyology.com.au/" target="_blank">Propertyology</a>, a full-time property market analyst, accredited property investment adviser, and REIA / REIQ Buyer’s Agent of the Year (2012, 2013, 2014).
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Median values fall for the first time in a year! Let's get some perspective

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GUEST OBSERVATION
Supply and demand for Brisbane apartments are on the up. Property investors would do well to consider both the short-term and long-term supply and demand outlook for apartments.
For a few years after the GFC, Brisbane did have an oversupply of property in general. It's one reason why Propertyology elected to do very little investing in Brisbane for some time. Tighter credit policies post-GFC then made it very difficult for developers to acquire project funding which enabled Brisbane's surplus of property stock to be soaked up.
During the middle of last year, Propertyology observed an increase in buyer activity and Brisbane's market recovery got under way. While we don’t believe that Brisbane is the number one location to invest in right now we do like the city's outlook and are investing there again.
Over the last year, several new, multi-storey apartment complexes have settled around Brisbane; inner-city vacancy rates have increased to a more normal level of around 3% as a result.
Yes, there is a significant level of new inner-city apartments in Brisbane's pipeline. In our view, suburbs such as <a href="/news">South Brisbane</a>, <a href="/news">West End</a>, <a href="/news">Fortitude Valley</a>, and <a href="/news">Bowen Hills</a> should be avoided by investors. ‘Property consultants' with vested interests will undoubtedly tell you differently.
Generally speaking, there is a growing trend for increased demand for apartment living across most capital cities and in some regional locations. Over the two year period to March 2014, 43% of new residential dwelling approvals in Australia were for attached dwellings. Yes, almost half. This compares to 30% of total approvals for the two years ending March 2007. Quite an increase!
<img src="/images/2014/05/23/pressley%20may%2023%20one.png" alt="">
New South Wales (refer Sydney) had an even bigger percentage of attached dwelling approvals over the last two years -56% - while the ACT (Canberra) and Northern Territory (Darwin) are even higher at a whopping 63% and 60%, respectively. Victoria (refer Melbourne Docklands) and Brisbane also have high percentages of apartment approvals, 45% and 43% respectively.
The millions of Baby Boomer Australians seeking to exit the workforce over the next decade simply don't have anywhere near enough money squirreled away to retain their current digs and have a healthy income stream. More and more Baby Boomers will be attracted to selling the suburban house, downsizing in to apartment living, and releasing a few hundred thousand dollars to supplement their income.
Market analyst, Michael Matusik, recently said: "Brisbane City has an aging demographic profile.  Increasingly, much of the housing market across the Brisbane City area will be looking to downsize and/or retire.  This will fuel the need for more attached homes; often smaller in size than traditional detached housing.  The catch-cry is “place for space”, meaning that buyers will be looking to live in quality projects, in established urban areas. The Brisbane downsize/retirement market will experience its greatest growth over the next ten years.  Interestingly, the first home buyer segment and even the upgrader market is unlikely to grow as much in size as those downsizing, suggesting that resale supply of baby boomer-first generation homes may exceed demand (first time buyers and those upgrading)."
There are plenty of people who don't want to spend their weekends maintaining gardens. Many Gen Y, for example, see a lot of merit in apartment living. There is a growing number of Gen Y’s who either can't afford the mortgage payments on a suburban house and / or prefer the conveniences of inner-city lifestyles.
While there will be an increase in apartment supply in Brisbane, there will also be increased demand.
Simon Pressley is managing director of <a href="https://www.propertyology.com.au/" target="_blank">Propertyology</a>, a full-time property market analyst, accredited property investment adviser, and REIA / REIQ Buyer’s Agent of the Year (2012,2013,2014).
Photo courtesy of Andrew Sutherland/Flickr/<a href="https://creativecommons.org/licenses/by-sa/2.0/" target="_blank">Creative Commons</a>.
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