New apartment developments with uninterrupted, north-facing views over Perth's Swan River are exceptionally rare.

Recognising just how limited those opportunities are, <a href="https://www.apartments.com.au/developers/edge-visionary-living">Edge Visionary Living</a>, one of Perth's most respected builder-developers, targeted <a href="https://www.apartments.com.au/developments/applecross-wa-6153">Applecross</a>, assembling an unrepeatable 6,342 sqm riverfront site on the corner of Moreau Mews and Canning Beach Road to create one of Perth's only new north-facing apartment developments directly overlooking the Swan River.

Today, <a href="https://www.apartments.com.au/buildings/riviere-residences-applecross-59-canning-beach-road-applecross-wa-6153">Rivière Residences</a> offers buyers a unique opportunity to choose between completed residences ready to move into now and off-the-plan homes in the final stage, Rivière West.

[smartcode_project:default project_id=28384 project_image_fid=3823]

Across the completed East and Central buildings, residents are already enjoying the development's luxury amenity, while two of the precinct's hospitality venues are now open.

The completed component of the development gives buyers the advantage of experiencing the finished product firsthand, including its uninterrupted river views, while still having the opportunity to secure a residence in the final stage.

"People are wowed by the view and the quality of the apartments,"&nbsp;Edge Visionary Living Sales Executive, Holly McSweeney, says.

"They're looking for the convenience of lock-and-leave living, but they're not looking to downsize on quality."

[smartcode_project:default project_id=28384 project_image_fid=3826]

The rarity of the development hasn't been lost on prospective buyers, McSweeney says.

For McSweeney, it all comes back to a location that is becoming increasingly difficult to replicate.

"Location, location, location," she says. "We are nestled right on the front of the Swan River. You can never get built out, so wherever you are in Rivière Residences, you've got views of the river forever."

The unique waterfront position has resonated particularly strongly with local downsizers. McSweeney says many buyers are long-time Applecross residents looking to transition from large family homes into a luxury apartment without sacrificing space, quality or the lifestyle they've enjoyed for decades.

<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/N_FowNW0wu8?si=vb25XFq1wZ-iufAW" title="YouTube video player" width="560"></iframe>

A major focus for Edge in recent years has been resident amenity. Across its apartment portfolio, from beachfront developments in Scarborough to luxury towers in South Perth, the developer has increasingly invested in the spaces beyond the apartment itself.

The strategy has largely been shaped by downsizer demand. Many buyers are moving from large family homes with swimming pools and established gardens. While they're looking to leave the maintenance behind, they don't want to compromise on lifestyle.

At Rivière, <a href="https://www.apartments.com.au/architects/hillam-architects">Hillam Architects</a> designed the resident facilities as an extension of each apartment. A 25-metre heated swimming pool takes advantage of the north-facing river outlook, complemented by a large gym, sauna and steam rooms, private dining spaces, residents' lounges, a cinema, games room, and dedicated wine and whisky rooms.

[smartcode_project:default project_id=28384 project_image_fid=372542]

The waterfront location has also proved to be a major drawcard. Residents are within walking distance of the Raffles Hotel, South of Perth Yacht Club, the Heathcote Cultural Precinct and the cafés, restaurants and boutiques along Ardross Street.

Beyond the location and amenity, McSweeney says many buyers take confidence from Edge's fully integrated development model.

Having delivered apartments across Perth for decades, Edge now designs, develops and constructs its projects in-house, giving the company greater control over quality, delivery and the finished product.

"What I love is when people walk through their apartment for the first time and say, 'This is better than what we imagined,'" McSweeney says. "We hear that all the time."

Completed apartments in the East and Central buildings are now available to inspect by appointment, while Rivière West, the final stage of the precinct, is expected to be completed in the first quarter of 2027.

[smartcode_project_cta:default project_id=28384]

Joel Robinson

North-facing Swan River views drive demand at Rivière Residences in Applecross

Nearly 60 per cent of apartments at McNab Group's $220 million The Tannery development in Brisbane's West End have sold ahead of the project's public launch, including a suburb-record $2.57 million sale for a two-bedroom apartment.

The early sales campaign has secured buyers for 50 of the project's 87 apartments, highlighting continued demand for larger owner-occupier apartments that combine generous floorplans with premium lifestyle amenities in one of Brisbane's most tightly held inner-city suburbs.

[smartcode_project:default project_id=143337 project_image_fid=374768]

McNab Group Executive Chairman Michael McNab said selling more than half the project before launch reflected changing buyer expectations.

"Selling more than half the project before public sales open tells us buyers are actively seeking apartments that offer something genuinely different," McNab said.

"Today's buyers are looking beyond four walls. They want homes that genuinely enhance the way they live, with spaces that support health, connection and everyday wellbeing."

[smartcode_project:default project_id=143337 project_image_fid=374767]

A key point of difference for the project is the adaptive reuse of the heritage-listed Dixon's Tannery building, which will become The Retreat, a residents-only wellness precinct rather than being redeveloped into additional apartments.

The Retreat will feature a sauna and steam room, hot and cold plunge pools, a commercial-grade gym, Pilates studio, cinema, library, co-working spaces and private dining room. Rooftop amenities will include a swimming pool, landscaped gardens, outdoor entertaining areas and dog-friendly spaces.

[smartcode_project:default project_id=143337 project_image_fid=374760]

Designed by Cottee Parker Architects with interiors by Tom Mark Henry and landscape architecture by Aspect Studios, The Tannery comprises 87 two, three and four-bedroom apartments across 11 levels overlooking the Brisbane River.

Cottee Parker principal Dee Passenger said preserving the original tannery building had been central to the project's design.

"The easy option would have been to maximise the site's development potential with additional apartments. Instead, McNab has chosen to preserve the original tannery as a shared wellness retreat, ensuring this important piece of Brisbane's history remains at the heart of the community."

Passenger said sustainability also played a key role in the design, with materials from the original industrial site salvaged and repurposed throughout the development.

[smartcode_project:default project_id=143337 project_image_fid=374761]

Motiv CEO Carly Cottam said buyers had responded strongly to the combination of larger apartments, wellness facilities and the West End lifestyle.

"We are seeing more buyers looking for homes in the sky that provide the space and functionality of a traditional home, while benefiting from the convenience and lifestyle that apartment living brings," Cottam said.

She said purchasers included both owner occupiers and investors, with demand coming from local buyers as well as interstate purchasers.

Coinciding with the public launch, McNab also announced a partnership with Queensland Ballet, whose neighbouring Thomas Dixon Centre shares historical ties with the original Dixon family.

Located on a 4,465 sqm site at 439 Montague Road, The Tannery overlooks the Brisbane River and is around 10 minutes from the CBD.

Construction is underway, with completion expected in the second half of 2027.

[smartcode_project_cta:default project_id=143337]

More than half of residences sold before public sales as McNab announces significant partnership with Queensland Ballet

McNab's The Tannery nears 60 per cent sold before public release, sets two-bedroom West End record

Iwan Sunito's vision for a landmark mixed-use precinct in Sydney's Inner West has taken a major step forward, with approval granted for the $1.9 billion Five Dock development first unveiled earlier this year.

The approved scheme by <a href="https://www.apartments.com.au/developers/one-global-capital">One Global Capital</a> will deliver an 80,500 sqm mixed-use precinct comprising 840 apartments, integrated hotel accommodation, commercial and retail space, alongside publicly accessible open space designed to create a new destination for the growing suburb.

"This is a significant milestone for One Global Capital and for the future of housing delivery in Sydney," Sunito said.

"The Housing Delivery Authority was established to identify major housing projects capable of delivering meaningful supply more efficiently, and we are delighted that Spencer Street has been recognised as one of those projects.”

He said the declaration reflected the rapid progress achieved since acquiring control of the site.

"In less than seven months we have progressed from taking control of the site to securing entry into one of the NSW Government's most important planning pathways. It reflects the experience of our team, the strength of our consultant group led by Urbis, and our long-term commitment to delivering transformational projects that contribute to Sydney's future."

When the project was revealed earlier this year, Sunito described the opportunity as one of the strongest development sites he had worked on.

"I probably hadn't appreciated the uniqueness of the site until more recently when putting together the concept plans," Sunito said.

"The proximity to the water, and the golf course opposite, is unlike any other part of Parramatta Road. We have a unique position and view corridors over the water that makes this one of the best sites I've worked on."

The development has evolved since its initial announcement, with the approved plans increasing the residential component from the originally proposed 750 apartments to 840 homes while retaining the project's focus on creating an integrated neighbourhood rather than a standalone residential development.

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/a-city-within-a-city-iwan-sunito-flags-1-5-billion-mixed-use-precinct-in-five-dock">"A city within a city": Iwan Sunito flags $1.5 billion mixed-use precinct in Five Dock</a>

The precinct will combine apartments with hotel accommodation, commercial workplaces, retail offerings and public spaces, creating a mixed-use environment intended to serve both residents and the broader Five Dock community. The proposal also continues the collaboration between One Global Capital and internationally recognised architect <a href="https://www.apartments.com.au/architects/koichi-takada-architects">Koichi Takada</a>, whose previous work with Sunito includes Infinity, Arc and Skye North Sydney.

Takada previously said the design was driven by a philosophy of integrating nature into the built environment.

"The concept for this development is born from our design approach to naturalising architecture," Takada said.

"The public realm benefits from biophilic design that integrates generous landscaping, and the development is optimised for natural daylight, airflow and water views to foster wellbeing, sustainability and spaces that foster community interaction."

Sunito has consistently described the project as a "city within a city", with a strong emphasis on creating a destination that extends beyond housing.

"We want to create a development that's not only to be seen, but to be experienced by the whole local community," he said.

The approval comes as Five Dock continues its transformation ahead of the opening of the Sydney Metro West line, with the new Five Dock station set to significantly improve connections between the Inner West, Parramatta and the Sydney CBD.&nbsp;

The precinct will also benefit from its proximity to the Parramatta Road corridor, nearby waterfront parklands and established retail and dining offerings that have made Five Dock one of Sydney's most tightly held Inner West suburbs.

Iwan Sunito secures approval for $1.9 billion Five Dock mixed-use precinct

The new <a href="https://www.apartments.com.au/new-apartments/yarraville-green-42-stephen-street-yarraville-vic-3013">Yarraville Green</a> development in Melbourne's inner west is showing that landscaping can be just as influential as architecture, with buyers responding strongly to the garden-first approach adopted from the outset by developer Excelon Projects and the project's design team.

Excelon appointed Six Degrees Architects and landscape architects SBLA to work collaboratively on the development, with a brief to create "a sustainable, design-led building with a focus on community."

That approach has resonated with buyers. According to Next Chapter Director Tom Hirini, who is leading the sales campaign, the landscaped communal garden has become one of the project's defining features, alongside its boutique scale and European-inspired cluster housing concept.

Local downsizers, right-sizers and established families already living in Yarraville and surrounding suburbs have accounted for the majority of purchasers.

[smartcode_project:default project_id=144913 project_image_fid=297740]

Yarraville Green will comprise 53 homes, including apartments and townhomes, arranged around the shared central garden to maximise connections to the landscaped open space. Parking has been moved underground, allowing the ground plane to be dedicated to greenery, pedestrian movement and communal spaces.

The landscape extends well beyond passive planting. Productive garden beds, a pergola, communal gathering spaces, garden sheds and a pet wash have all been integrated into the masterplan, creating spaces designed to encourage everyday interaction between residents.

[smartcode_project:default project_id=144913 project_image_fid=297741]

The interiors continue Excelon's focus on craftsmanship, incorporating bespoke elements by Melbourne artisans including leadlight detailing by Adadaz, hand-turned timber hardware by Auburn Woodturning and blown-glass lighting by Ruth Allen.

Sustainability has also been embedded throughout the project, with Yarraville Green targeting an average 7-star NatHERS energy rating through passive design principles, rooftop solar servicing common areas and rainwater harvesting for landscape irrigation.

[smartcode_project:default project_id=144913 project_image_fid=297735]

Construction continues to progress at Yarraville Green, with structural works well underway and framing works approaching completion under builder Balmain &amp; Co. The project remains on track for completion in mid-2027.

Apartments at Yarraville Green are currently priced from $625,000, while townhomes start from $1.4 million.

[smartcode_project_cta:default project_id=144913]

Garden-led design drives buyer demand at Yarraville Green

National diversified developer Fortis has officially launched Crest &amp; Walker, its latest Brisbane apartment development, with construction now underway on the 20-storey Newstead project.

Award-winning builder BINAH has commenced construction on the Bureau^Proberts-designed building, which will deliver a limited collection of 65 two and three-bedroom apartments on Kyabra Street.

[smartcode_project:default project_id=145922 project_image_fid=373556]

The project marks Fortis' fourth active residential development in Brisbane, following River House, which is nearing completion, alongside projects in New Farm and Hamilton as the national developer continues to expand its South East Queensland pipeline.

Fortis General Manager – Development Queensland Dan Boman said Crest &amp; Walker reflects the developer's long-term commitment to delivering design-led residential projects in Brisbane's established inner-city suburbs.

"We're proud to be strengthening our presence in Brisbane with Crest &amp; Walker, particularly in such a sought-after lifestyle destination as Newstead," Boman said.

"Every Fortis project is shaped by its context, and we approach each one with the respect and care it deserves.

"Our focus is always on creating places that feel connected to their neighbourhood and elevate the everyday experience for residents. Newstead continues to evolve as one of Brisbane's most sought-after urban communities, and Crest &amp; Walker reflects our ambition to contribute meaningfully to that story."

[smartcode_project:default project_id=145922 project_image_fid=373559]

Positioned between Gasworks Plaza and James Street, <a href="https://www.apartments.com.au/new-apartments/crest-walker-newstead-12-kyabra-street-newstead-qld-4006">Crest &amp; Walker</a> has been designed as a boutique residential address offering privacy and generous living spaces within one of Brisbane's most established lifestyle precincts.

The building features a contemporary brick podium softened by integrated landscaping, while the upper levels are characterised by restrained architecture and enduring materiality. Interiors have been designed to maximise natural light, acoustic performance and long-term liveability.

[smartcode_project:default project_id=145922 project_image_fid=373583]

Residences comprise spacious two and three-bedroom floorplans, with two-bedroom apartments priced from $1.55 million and three-bedroom, half-floor residences from $3.95 million.

Residents will have access to a wellness-focused rooftop featuring a swimming pool, sauna, steam room, landscaped dining spaces and outdoor lounge areas overlooking Newstead and the Brisbane CBD.

[smartcode_project:default project_id=145922 project_image_fid=373571]

Sales are being managed by Slaite Projects, with Fortis expecting strong demand from owner-occupiers seeking a high-quality, design-focused apartment in one of Brisbane's most tightly held inner-city suburbs.

Completion of Crest &amp; Walker is slated for late 2028.

[smartcode_project_cta:default project_id=145922]

Fortis expands Brisbane pipeline with launch of Crest & Walker in Newstead

Strategy

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I noted recently how I was bemused that investment advisors have recommended buying property in mining towns.
Looking back, I said that my view is that this is "madness" - in retrospect an unfortunate choice of word - perhaps "foolhardy" would have been a better choice.
Anyway, this morning I received <a href="https://www.realwealthaustralia.com/helensrant10/?inf_contact_key=ffcf5f9e4758af6d591bf4ff40ea780457b7c97853867205df134e8795369d5e" target="_blank">this podcast</a> in my inbox from Real Wealth Australia which went even more to the point:
"The mining industry is over. Resources is over. People buying in those towns...it's just insane".
Clearly, I agree that it's necessarily a very smart idea to speculate in mining town property, right down to the misuse of inappropriate terminology. 
But what really left me scratching my head was it that was Real Wealth Australia that was <a href="https://www.realwealthaustralia.com/wp-content/uploads/2011/10/Boom-Suburbs-Report.pdf" target="_blank">recommending mining town property in the first place</a>.
What I can't for the life of me fathom is what has changed to cause the reversal in viewpoint.
It surely can't be the peak in mining investment as the construction boom gets set to recede, since that has been well known about for years and well documented all over the press and the internet.
 <img src="https://4.bp.blogspot.com/-9Pqa-8BsmR0/U997X63Pn-I/AAAAAAAAO8A/n9lnWTaKeoE/s1600/New+Capex.jpg">
In fact my former employers Deloitte have been <a href="/expert-insights/investing/mining-led-construction-boom-to-peak-in-2014-deloitte">warning about the forthcoming peak of the mining boom</a> for so long that it had become something of a point of general amusement and occasional mirth in certain media circles.
And it certainly can't be the reversion of commodity prices which has caused the shift in viewpoint, since I don't know of anyone who seriously believed that Australia's terms of trade could remain so grossly inflated against their long-term averages.
It wouldn't make any sense to have based any strategy on such a hugely obvious anomaly. 
 <img src="https://2.bp.blogspot.com/-0C_iq1IhY9Y/U998A5a3tBI/AAAAAAAAO8I/rlG4KQyjO7c/s1600/Commodities+1.gif">
Of course commodity prices globally are somewhat unpredictable and, for example, the copper spot may eventually rebound as the global economy recovers and should demand from Asia remain strong.
But the fact of the matter is that the RBA's index of commodity prices is heavily weighted towards Australia's bulk commodities (iron ore, thermal coal, metallurgical coal) which account for 56% of the index. If they tank, so does the index.
 <img src="https://2.bp.blogspot.com/-PSyrMswZZAM/U998BOKVkWI/AAAAAAAAO8M/YrWuaj9nRes/s1600/Commodities+weighting+2.jpg">
The iron ore price has taken a shellacking this year, but again it seems highly unlikely that anyone could have believed that a price which had run up from $1 per tonne to $180 per tonne in a decade could ever be sustained. 
Even now back down at around $95 per tonne, there are plenty who are arguing the spot price must revert towards its longer term average.
<img src="https://3.bp.blogspot.com/-AT1Gt2UVys8/U999LYzMJ8I/AAAAAAAAO8c/6U7a_9asx6g/s1600/Iron+Ore+price.jpg">
So I'm basically stumped. 
The transition from construction phase of the boom to production phase is the only thing I can come up with, but even that has surely be known about for years.
Property investment can be a very effective long-term strategy and act as an inflation hedge if you invest in landlocked suburbs of capital cities which have growing populations.
This is because new dwellings must be constructed to house the new population and new houses must always be built in today's dollars and at today's labour and materials costs.
However, when people focus on the cash-flow element of property as being more important than the basic fundamentals they can get themselves into a real mess, because they are trying to wrench investment property into something it's not meant to be (i.e. an income asset).
If income today is your primary focus, residential property is the wrong asset class. 
I saw this first-hand in Britain when investors who focused on yield at the recommendation of seminar promoters were buying in small towns in the north-east or the Potteries before the financial crisis.
Prices crashed to zero in some extreme cases (and if you're going to buy regional, it's post-crash that you should buy). 
Mining towns sit right at the top of the risk spectrum - frankly, they never were a very good idea for most investors, and they certainly aren't right now. 
You can visit <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) or Pete's <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blog</a>.
His latest book is '<a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>' .
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pwargent-M4siyDbqQY

Is it "insane" to invest in mining towns now? Well, it was never a good idea in the first place

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Have a look at a home loan comparison website and you’ll see a growing number of variable rate mortgages are now below 5%.
With mortgages this affordable you could refinance out of an old expensive loan and into a low cost one; and it’s also a good opportunity to repay more than you have to – to build up equity more quickly.
But a lot of people are asking if the low rates mean it’s time to buy an investment property?
Firstly, I suggest potential investors separate their thinking between the mortgage interest rates and the investment itself. Long after variable rates have returned to normal levels, you’ll probably still own this investment and it should make financial sense.
The point of an investment property is to harvest the ‘total gross yield’ – that is, you want the property to produce rental income and capital growth. You want enough rental income to help pay the mortgage and meet costs month-to-month, and you want sufficient capital growth so that over time it becomes a more valuable asset.
If you can achieve a 5% per annum rental yield and the average growth in the suburb is 3% per annum, you have an 8% gross yield. But there are many things that can vary this result.
Does the property need renovations? Is it maintenance-intensive? Will you use a property manager? Is it close to amenities such as schools, shops and train stations and likely to be sough-after by tenants? All of these things will affect your yield over the long term, and property is a long-term game.
There’s really no substitute for homework – you must have a clear view about ownership costs.
You also have to think about negative gearing, which is a tax rule that allows you to take any losses on the property and use them to reduce your taxable income, thereby reducing your taxes.
This brings us to the cost of your mortgage. Many people want to buy an investment property simply because they can, but the cost of entry isn’t the end of the discussion.
The investment mortgage has to be repaid from income, while most people are also funding the family home loan from the same income. Even if negative gearing gives you a small tax break, you have to calculate if you could afford to pay the investment property mortgage if the rates moved upwards by, say, 2%, or 3%.
Fixed rate mortgages only give you breathing room for the term of the fixed rate – they don’t make rising interest rates go away.
Low interest rates make it affordable to buy, but you have to know what it costs to own it, which means understanding where interest rate rises will leave you.
And, a final hint: the best property investments are made at purchase. Try to buy a property at a good price, with low maintenance, in a high-demand area, where prices are just starting to pick up. Be patient and do your homework.
If you buy well, you’ll do well.
Mark Bouris is executive chairman of wealth management company <a href="https://www.ybr.com.au" target="_blank">Yellow Brick Road</a>.
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mbouris-tauSvXGAM2

Interest rates are low, but does this mean you should buy an investment property?

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Golf was an utter obsession for me as a teenager, the blistered hands testament to the fact that my mates and I would think nothing of playing 36 or even 54 holes in a day through the school hols.
At my best I was a single figure handicapper, which may sound impressive if you're a high handicapper, but in reality given the endless summers spent out on the course or on the practice range, I probably should have gotten lower. Upon heading off off to uni to study there was far less time to dedicate to the game and I was frustrated to see the junior pros from our club improve and overtake me - golf is a terribly unforgiving sport to those who do not practice. 
The moral of the story is that if you can't be the best at something, then you should just quit and give it up. 
Here are five golfing analogies for investors I picked up from watching the British Open...
<ul>
<li>Discipline</li>
</ul>
My teenage mates and I were always thrilled by watching John "Wild Thing" Daly play golf with his "grip it and rip it" mantra. 
An eccentric anti-establishment character, Daly drove coaches and administrators to distraction with his non-conformist behaviour, and against all the odds won two major championships including the British Open itself at the home of golf, St. Andrews.
As young lads, Daly appealed to our young male egos. He belted the golf ball a proverbial mile with his 'Killer Whale' driver and a bit like us he was rebellious, drank lots of beer and had a terrible haircut.
As a general rule, though, major-winning golfers are not like John Daly. 
Ian Woosnam reportedly enjoyed a pint, and some golfers periodically over-indulge in food or other 19th hole pleasures, but most pro golfers at the peak of their game are relatively fastidious in their discipline and detailed preparation
Routine, preparation, discipline.
Discipline is the first rule of successful investment. 
Take the stylised example of a person aged 25 who earns $50,000 per annum and receives annual pay increases of 3.5% through their working career. 
Thanks to compounding growth, even at only 3.5% annual pay increases their total cumulative gross earnings could be far, far higher than you might intuitively expect.
<img src="https://4.bp.blogspot.com/-WuK1fnaEnrs/U9Kkn99EGLI/AAAAAAAAOwU/M7QG0nufC5w/s1600/1..jpg">
It's not fashionable to say so, but wages growth has outpaced inflation for years in Australia across all income brackets, and on average folk have <a href="https://petewargent.blogspot.co.uk/2013/05/fishers-money-illusion" target="_blank">more disposable income</a> than in years gone by. 
It takes a level of commitment and discipline, sure, but the fact of the matter is that most people with a full-time job should be able to save and invest something for the future.
You tend to make some enemies pointing this out, but there's nothing like living in a Third World country for a couple of years to change your perspective and realise just how blessed we are to live in a country of abundant wealth such as Australia. 
The first rule of investing is to establish the discipline to spend less money on junk that we don't need and set aside money to invest.
One of the scariest things about working in professional practice where there are many high income earners is seeing people work for decades yet setting aside nothing for the future (often in Britain, not even a pension contribution).
Article continues on the next page. Please click below
<hr class="system-pagebreak" style="line-height: 1.3em;">
<ul>
<li>Sacrifice</li>
</ul>
In a similar vein, the greatest golfers through history have made huge sacrifices to reach the top echelons of the game.
Instead of idolising John Daly or the eccentric genius of Severiano Ballesteros, in hindsight as youngsters we should have been learning from the unstinting work ethic of the single-minded Sir Nick Faldo.
From a very young age Faldo was driven by a "quest for excellence", and dedicated countless thousands of hours to being the finest and most thoroughly prepared player that he could be. 
A golfer of incredible mental fortitude, Faldo took the unthinkable step for an Order of Merit winner of remodeling his swing under the watchful gaze of David Leadbetter in the mid-1980s. 
After enduring several frustrating years in the relative wilderness, the brave step paid dividends and Faldo went on to win no fewer than six major championships, becoming a true golfing great and fulfilling his quest for excellence.
Outstanding results in all spheres almost always require sacrifice and a willingness to go the extra mile. 
<ul>
<li>Patience</li>
</ul>
At the major championships, pro golfers aim to get themselves into contention by keeping the ball in play and making few costly errors, perhaps looking to pick up a few birdies on the par five holes.
As a rule, professionals don't go out on to the course aiming to shoot a 62, instead they focus on playing the percentages, approaching each shot in isolation and playing every situation on its merits.
Golfing legend and eight-time major winner Tom Watson aged 64 incredibly recently shot his age - a round of 64 - by applying precisely this disciplined approach.
If a player is on course to miss the cut towards the end of the second round they may take a few more calculated risks, but generally major championship golf is a percentages game and being too aggressive can backfire.
Golf psychologists therefore tend to use phrases like "control the controllables", "routine, routine, routine" and "beat them with patience". 
I recall the junior golfers at our club frequently annoyed senior members by knocking them out of Matchplay events where points are awarded for winning individual holes, yet were rarely so successful in the Medal tournaments where cumulative strokes are instead recorded.
Being a good investor is more akin to a Medal competition than a Matchplay event...but it often takes an early defeat or two to understand this.
The first time I went to a casino I won £690 and I thought it was brilliant (bad news). The next time we went I lost the lot which was a salutary lesson, and funnily enough I've gambled in casinos very rarely since! It also took me a hefty $50,000 loss on speculative mining shares to realise that there is no need to go down that path again.
Investing should be fundamentally simple for those of a patient temperament and an accumulator's mentality. Why speculate in low quality companies which have never made a profit or buy property in remote mining towns to chase a fast buck? 
Far better to aim to continue accumulating high quality assets such as shares in dividend-paying blue chip companies, index funds or well-located capital city properties, which will continue to deliver returns in perpetuity. 
 <img src="https://4.bp.blogspot.com/-xZ1-7M0G0Vg/U9KkuMdePYI/AAAAAAAAOwc/EOHQeczwPzY/s1600/2..jpg">
 
<hr class="system-pagebreak">
<ul>
<li>Leverage</li>
</ul>
I'm not sure about you but I can't move my hands particularly fast. Yet when a supreme athlete such as Tiger Woods hits a golf ball, it really stays hit and the clubhead speed generated can top an awesome 120 miles per hour. How so? The reason is due to leverage.
Using the longest club in the bag, the 'one wood' or driver, there are golfers out there who can hit the golf ball extraordinary distances...up to half a kilometre in some cases! As Archimedes said: "give me a lever long enough lever and I shall move the world". 
Whooshka! Of course, in tournament play, one will rarely see a golfer hit a ball in such a manner, due to the necessary lack of control. All golfers use leverage to their advantage, but it must be utilised with a level of restraint and control, and a bit of common sense. 
Leverage is the principle reason that average investors look to investment property - residential real estate is the one asset class which allows them to use the greatest leverage. 
I recall as a nipper my parents selling their house which they'd bought for £4,000 in Sheffield for more than double the amount they had paid for it. They upgraded and later bought a house for £30,000 which they'd negotiated down by £1,500.
Even as a youngster I was struck by three things. Firstly, the sheer size of the numbers involved as compared to my old man's reasonably modest pay cheque.
Secondly, how even for a family where funds were pretty tight - a family of five boys supported on my Dad's probation officer salary - it was possible to build thousands of pounds of equity over time as a property owner.
And thirdly, how each time my parents moved house, prices had moved higher - much higher - and that wasn't only because they were trading up.
That's the combined power of leverage and compound growth at work, which allows sensible homeowners to build up significant equity or net worth over time.
In my case, I intuitively looked to investment property when I was in my 20s because it allowed me to invest with millions of dollars that I could not otherwise have done.
It should go without saying, however, that leverage is a double-edged sword and should only be used sensibly and with a long-term outlook, since while gains can be magnified, so too can losses.
The anti-real estate contingent tend to oscillate interchangeably between two lines of argument: that property has not been a good investment (demonstrably false, if you have invested sensibly) and that property investment is unethical or socially useless.
The fact of the matter is, if you know what you're doing, property can be an outstanding investment as part of a balanced portfolio.
<ul>
<li>Risk Management</li>
</ul>
If you were watching the British Open carefully, you'd have seen the brilliant Rory McIlroy decline to use his driver on the 72nd hole, instead opting to hit a more conservative long iron.
Why would a guy who had been melting it up to 400 yards off the tee across the hard links turf not use his biggest club? Risk management. 
McIlroy had already taken calculated risks earlier in the tournament and now was using less leverage and eliminating risk. It worked a treat and he took out the claret jug as the Open Championship winner.
Successful investing is very much like a 72 hole golf tournament in the the winners must use sound 'course management' to avoid making catastrophic mistakes and manage risk.
Moreover, it generally pays to be a bit more aggressive and invest in what are perceived as riskier growth or ownership when you are younger and have time on your side. 
Later in the game you may elect to deleverage or transition towards income assets, but the key is to get yourself into the happy position of having these choices.
You can visit <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) or Pete's <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blog</a>.
His latest book is '<a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>' .
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Five golfing analogies for investors

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A sharp lift in supply and the opportunity to lock in rates for an extended period means this spring will be a great time to buy.  
There’s a certain rhythm and flow to Melbourne’s social, sporting and cultural life and this is reflected in our residential property market.
Activity levels, auction clearance rates and price growth are influenced by what pre-occupies vendors and purchasers at various times of the year.  
These factors are so deeply ingrained that you can pretty much set your calendar by them.
The trick is to understand that the behaviour of vendors and purchasers is influenced by different things, so the two groups don’t move in synch. This means there are better times of the year to buy, and better times to sell—but they’re the opposite of what you may think.  
Melbourne’s property market calendar kicks off in January–February, when people have time to down tools, take stock and set goals for the coming year.
During this time, many Melburnians make a New Year’s resolution to upgrade or downsize their family home, or to buy an investment property. They begin entering the market in large numbers, hoping to get their purchase out of the way relatively quickly and avoid months of disheartening house-hunting.  
When they start searching, they find that there isn’t much to choose from. This is because would-be vendors are pre-occupied with re-establishing back-to-school and work routines.
They’re reluctant to take on the added burden of preparing and presenting their home for sale.
The resulting mismatch between purchaser and vendor behaviour creates an undersupply of property relative to demand.  
From March through to May, vendors are well into the swing of the year and are ready to put their homes on the market. The level of supply increases and becomes pretty much even with the level of demand from purchasers who couldn’t find what they wanted earlier in the year.  
Then comes winter.
From June to August, the level of demand stays consistent as purchasers continue their search.
However, the level of supply drops significantly, because vendors stay out of the market in the mistaken belief that people don’t want to buy in winter. In the inner and middle suburbs, where auctions make up a substantial proportion of property transactions, supply can fall by as much as 50%.
Buyers who have been in the market since early in the year become increasingly frustrated.
When an opportunity presents itself from amongst the limited choices available, they are inclined to pay more to secure a property they really like, or to buy a home they’re not overly keen on, simply because they’re tired of looking.  
As a consequence, property prices rise—meaning that vendors who are savvy enough to go against the wider convention and put their homes on the market during winter stand a good chance of achieving a strong result.  
Once spring rolls around, the behaviour of purchasers and vendors shifts again, and so does the balance between supply and demand.
With warmer weather and the ability to show off blooming gardens, vendors believe more buyers will be searching. They reason that it’s a better time to sell, so the level of supply increases.
In reality, demand from buyers doesn’t increase significantly. Yes, some purchasers begin searching in the warmer weather. However, many are pre-occupied by their children’s school exams, major sporting events and the like, so most enter the market at the beginning of the year.  
At this point, supply and demand become more evenly matched once again, and price growth tends to moderate. In the coming weeks auction levels will increase dramatically and we will see some weekends where over 1,000 properties go under the hammer.  
Purchasers will not only have the luxury of choice this spring but they will also be able to lock in their interest rate at incredibly low levels.
Spring is only four weeks away so now is the time to get prepared so you are in a position to move when the right opportunity when it presents it’s self.  
MARK ARMSTRONG is a director of <a href="https://ratemyagent.com.au/" target="_blank">ratemyagent.com.au</a>, Australia’s number one real estate agent rating website.
This article was originally published on Property Observer in July 2013.
 
 
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marmstrong-sd3emVLPPb

This spring will be a great time to buy

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Each week I receive phone calls from people who have started a property development and then fallen into trouble.  
I can't help taking these SOS calls from fellow developers but I've noticed a pattern...there seems to be three different areas in which the issues fall:
<ul>
<li><a href="/expert-insights/the-three-most-common-first-time-property-developer-mistakes-site-selection">Site selection</a></li>
<li><a href="/expert-insights/the-most-common-first-time-property-developer-mistakes-team-selection">Team selection</a></li>
<li>Not understanding the development process</li>
</ul>
The development process is complex - there is no two ways about it. Even what may seem the most simplest development can turn into a very time consuming project.  Although Property Bloom has completed over 80 developments, all of which I have personally overseen, I still find tiny nuances that make each development unique and challenging. 
However, if you have some understanding of the steps needed to be taken on your property development journey, then the development process can be simplified.
The development process can be broken down into a number of steps:
 
<ul>
<li>
Research or due diligence  Most of your research should have been done by now because choosing  the right location for your development cannot be underestimated. Once you've narrowed down the area you're going to work in, you need to research the needs of your target market.  Your target market is either the people you'll be renting to if you hold onto the dwellings you build or the people you'll be selling to. What do they want in a property? You need to balance this with what you can afford to build, always be careful not to overcapitalise by assuming you have to give everything. 
</li>
<li>
Designing your project is the next step in the process. Use either a builder's design and make some minor changes to suit your needs or use an architect or drafting service to design exactly what you want. In more upmarket areas, you may want to deliver something more unique so spending time and money on coming up with the right design is important. 
</li>
<li>
The planning process is another very important processes. Ensure you are meeting the requirements of the local council's Development Control Plan and Local Environmental Plan. This is complex and unless you want to spend days studying these enormous documents, engage a planning consultant or architect that understand these local requirements. This should save time so when you lodge your DA there should be little hold up in having to make changes to your plans. 
</li>
<li>
Engineering for storm water management, driveways and slab design is required to obtain the final approval of your Construction Certificate. Again, engage a good engineer but make sure you have a basic understanding of what they are designing.  Don't be afraid to ask questions. I was able to reduce some costs on a three villa project by questioning the number of storm water detention tanks required under the driveway. I knew each tank meant more costs so just by asking the engineer to check the water volume calculations meant  if we could cut two of the eight tanks required in that project. 
</li>
<li>
Once you have all your Planning Consents, then it's important to have a good understanding of the building process which will help you as you review your builder's contract. You need to understand terms such as 'Provisional Items' and 'Excluded items' as if one of these blows out, so can your development profit.  Check the contract and discuss with the builder so that they can explain clauses to you. You can also have your solicitor look over the contract. Many builders will use a standard Housing Industry Association contract. Check the drawdown schedule as this will impact on your holding costs. 
</li>
<li>
Maximising your finance and getting the best deal is an important step in the process.  Your bank will need a number of documents such as the consents and builder's contract before they can give you unconditional finance approval. Make sure you allocate four to eight weeks in your schedule to get your finance in place. This often draws out depending on how slow your bank is. The longer they take, the more holding costs you are paying waiting for finance. Your builder cannot start construction without a Letter to Commence from your bank. 
</li>
<li>
Once the builder has this permission to commence work, you move into an exciting but still risky part of the development - the build phase. The main area for cost variation can be in the site preparations and slab work. Until your site is cut, retained and slabs are piered and then laid you will not really know the true costs of your building works as most Provisional items are loaded into this early stage of building works. 
</li>
<li>
It's exciting to see your project come out of the ground and as the building works draw to a close, the process then moves into the completion stage. Now you need to maximize your rental and depreciation benefits or sale return. You will need to choose your management or sales agent carefully. Brief your quantity surveyor at this point to start work on your depreciation schedules and make sure you include all consultant fees, including project management if you have used a professional project manager.   
</li>
<li>
You cannot relax just yet. You need to, attend the practical completion and handover inspections with your builder and have a good understanding of their warranty periods. You need to obtain Occupation Certificates which will not be issued unless everything is complete.
</li>
</ul>
 
As project managers, our job is to manage all the fine details of the development process. There are many areas that need your undivided attention at the time. 
As part of our project management process, we prepare a detailed weekly report for clients including milestones met that week, goals for the following week to achieve and photos showing the progress. Also included is news reports in the local area that may impact on the end result. Our job is to focus entirely on the process so that our clients don't have to. It can be beneficial for inexperienced developers to use a project manager to minimise and help them through the challenges a property development can bring.
<a href="https://www.propertybloom.com.au" target="_blank">www.propertybloom.com.au</a>
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jochivers-wq5Bp59R5a

The most common first time property developer mistakes: Not understanding the development process

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GUEST OBSERVATION
If NSW and Sydney are representative of the market dynamics on the national scale then there is a straightforward answer to question “Where to buy?”
Centrally located properties in the capital city offer the best return long-term for passive property investors, whether owner occupiers or those buying to let.
A Common Dilemma
Property buyers face a choice between more affordable properties which offer attractive rental yields but are further away from the city centre or in regional locations, or more expensive properties in central locations but with possibly much lower rental yields.
Many property advisors would recommend the first option, as it offers better cash flow from day one with reduced capital commitment, all things being equal.
However, for passive investors the second option is a much more sensible choice. This also holds true for those who buy and hold properties over a long period and are not into more adventurous activities like buying to renovate or redevelop, looking for a quick flip, or to access an exceptionally high yield over a short period of time.
Let’s examine historical information that leads to this conclusion.
The Evidence
Housing NSW <a href="https://www.housing.nsw.gov.au/About+Us/Reports+Plans+and+Papers/Rent+and+Sales+Reports/" target="_blank">publishes quarterly sales statistics</a> for Local Government Areas (LGA) and the records date back to 1991 for many locations, totalling just over 22 years of data.
The information is grouped into inner, middle and outer rings for Sydney, as well as into regional centres (i.e. “Rest of Greater Metropolitan Region”) and the rest of NSW.
Simple analysis of changes in median prices over the past 22 years (from July 1991 to December 2013) reveals quite an interesting picture, as summarised in the table below:
<img src="/images/2014/07/15/Table1_change_in_median_prices_NSW.png" alt="">
The increase in median prices in LGAs located in the inner ring outstrips the rate of growth in any other region in NSW.
This is particularly the case with non-strata dwellings which increased over five times in the last 22 years (that is, December 2013 median price is now six times 1991 median price), comparing to 2.4 times rise for the “Rest of NSW”. The difference over the 10 year period is not as dramatic, with the exception of strata dwellings, but still the pattern is obvious.
The following map presents a 20-year perspective on median sale price growth of non-strata dwellings to highlight the key point [click image to launch interactive map]:
<a href="https://www.propertyobserver.com.au/https://mapdeck.com/256" target="_blank"><img src="/images/2014/07/15/SydneyGMR_20yr_price_change_by_region_.png" alt=""></a>
Let’s chart the relative change in median prices over time for additional insights.
<img src="/images/2014/07/15/Chart1_change_in_median_prices_NSW.png" alt="">
The picture is quite clear – over the long term, median prices grew faster in the metropolitan area than in the rest of NSW.
<img src="/images/2014/07/15/Chart2_Inner_Sydney_median_prices_Dec13.png" alt="">
 <img src="/images/2014/07/15/Chart3_Inner_Sydney_change_in_median_prices_Dec13.png" alt="">
Again, over the long-term median prices in the inner ring LGAs grew faster than for the rest of Sydney (with exception of a short period between 2000 and 2003).
Article continues on next page. Please click below. 
<hr class="system-pagebreak">
What It All Means
There are important clues in the above charts for property buyers. In particular:
<ul>
<li>The inner ring properties show higher volatility in median price movements at the time of economic uncertainty – which means, timing of purchase decisions is crucial and there are bargains to be found for those with contrarian views (or well informed!).</li>
</ul>
For example, median price for the inner ring increased from $515,000 in March 2009 to $822,000 in December 2013 – a jump of over $300,000 or 60% in just four and a half years, comparing to a $98,000 or 28% increase for the regional part of GMR. The bargain buys can deliver even more substantial returns than indicated by changes in median prices.
<ul>
<li>Between 2003 and the end of 2007, which is generally perceived as a period of no price growth in Sydney, the inner ring still recorded material gains in median prices.</li>
</ul>
This illustrates that attractive and desirable locations tend to maintain the momentum when the rest of the market stagnates.
<ul>
<li>Unless you buy two properties in the outer areas for the price of one in the Inner Ring, the math favours buying in the more expensive area.</li>
</ul>
That is, if you opt for a cheaper property instead of buying in the Inner Ring, even if that location experiences comparative price growth to the inner ring, the higher priced location would have delivered better overall profit.
For example, based on the above chart, a $100,000 property purchased in 1991 in regional part of Greater Metropolitan Region would quadruple in value to $400,000 by December 2013 (i.e. $300,000 rise). Not bad. However, a property purchased for a median price in the inner ring, which also quadrupled in value, would increase from $200,000 to over $800,000, delivering $600,000- a whopping $300,000 more- in capital gains.
“But the yield!” you may say. Well, in this case 1% or even 2% better rental yield on the cheaper property would not make up the difference.
<ul>
<li>Outer regions can outpace price growth of the inner ring properties over a short period and price growth in those regions generally lag the metropolitan region – which presents an opportunity for late comers who missed out on the “city boom”, including first home buyers.</li>
</ul>
However, since timing of the purchase plays a crucial role in catching the maximum price movement, investment in regional properties should be viewed as rather opportunistic (not to say speculative) and therefore as suitable for only more adventurous investors or buyers who are prepared to stick to their decision for a long time.
Zooming In For More Details
We know now that the inner ring offers the best opportunity for price growth but it has to be acknowledged that not all locations within the region perform equally well over time.
The following table summarises change in median prices in the last 10 and 20 years for LGAs located in the inner ring.
 <img src="/images/2014/07/15/Table2_change_in_median_prices_Inner_Sydney.png" alt="" style="line-height: 1.3em;">
Some locations are better for non-strata dwellings – <a href="/news">Marrickville</a> for example did quite well with median price increase of almost 4.5 times over 20 years, while other are more favourable for strata properties, like <a href="/news">Waverley </a>which increased by a similar proportion.
The map below highlights where the largest change in median prices was for strata dwellings over 20 year period [Click image to launch interactive map]:
<a href="https://www.propertyobserver.com.au/https://mapdeck.com/250" target="_blank"><img src="/images/2014/07/15/Sydney_LGA_20yr_price_change_strata.png" alt=""></a>
View all maps, <a href="https://mapdeck.com/?deck_id=22" target="_blank">click here</a>.
This illustrates that choice of location and compatible property type are very important considerations in making purchase decisions.
Another observation worth mentioning is that even the worst performing locations in the inner ring did better for strata and non-strata dwellings than the worst regional locations. This should give confidence to the first time buyers or novice investors that buying in the inner ring can compensate to some degree for less than optimal choice of specific location.
End Note
As a prospective buyer – whether investor, upgrader or first home buyer – you are facing three fundamental questions: What to buy?  Where to buy?  When to buy?
Each of these questions can have quite a complex answer, which I will continue to explore on Property Observer with detailed analysis as well as via regular features, like my monthly <a href="/expert-insights/buying/growth-slowing-but-no-sign-that-cycle-has-peaked-june-state-of-the-market-analysis">State of the Market reports</a>.
However, in the end, it all boils down to a simple, frankly quite boring but well proven formula – location, location, location! One cannot go wrong following this simple advice.
Arek Drozda is an independent property market analyst.
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adrozda-Nq9GwoWWBW

Inner ring the best bet in Sydney and here's why

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An interesting article last week comparedthe returns from property and shares over 10 and 20 year periods respectively to December 2013. 
<div>Of course, <a href="https://www.smh.com.au/business/the-economy/property-vs-shares-which-did-better-20140619-3afda" target="_blank">the conclusions </a>usually depend on the preconceptions and prejudices of those making them, but let's take a quick squiz anyway...</div>
Equities
First and foremost, what the research shows is that a diversified, dividend-rich portfolio of shares continues to be a wonderful investment for those with a considered and long-term outlook.
Gross returns of 8.7% over the last 20 years imply that an unlevered $100,000 portfolio of shares in 1993 could have been worth a little more than $500,000 by December 2013, a fabulous performance by anyone's measure which easily outperformed the rate of inflation or returns from fixed income products.
Over the last 10 years, despite the global share markets crash during the financial crisis, gross returns inclusive of dividends from Australian shares recorded an even stronger 9.2% per annum, implying that you could have turned $100,000 into somewhere just shy of $250,000 over the decade to December 2013, with dividends having been reinvested.
The returns continue to be forever volatile, of course, but over a long time horizon a diversified portfolio of productive, profitable, industrial companies should deliver outstanding dividend income and capital appreciation.
Property
The returns on residential investment property were recorded as having "lagged" at only 6.1% per annum over the past 10 years.
As noted above, I don't usually bother too much with reading the conclusions of the commentators, because they invariably reflect the prejudices of those making them, on both sides of the property versus shares fence.
It's certainly the case that that residential property prices are likely to experience lower capital returns in the future than they have in times past, since we have already experienced the structural shift to lower inflation and equivalently lower interest rates, as well as having undergone a demographic shift towards a greater preponderance of dual income households.
My chart below shows that dwelling prices have acted in markedly different fashion by capital city over the last decade:
<div class="separator"><img src="https://4.bp.blogspot.com/-2F-1QRuV_iU/U6TfwmsjmHI/AAAAAAAAN9A/oa6buJoTOrk/s1600/ABS+long+term+prices.jpg"></div>
Stretch the figures back 20 years, and Australian residential property has returned an astounding 9.9% return per annum, a huge compounding annual return and the sorts of figures, one supposes, which allow people like me to be pontificating on matters of the world via the blogosphere rather than doing anything more productive with my time.
Over 20 years, property has been the strongest performing asset class by a sizeable margin, and a huge margin when leverage is taken into account.
Comparisons?
To a certain extent, there must be limited value in comparing returns on the two asset classes since they serve very different purposes and are as quintessentially different as chalk and cheese.
The main advantages of investment property may seem to be (a) the greater leverage used by average investors, and (b) that average punters appear more inclined to hold investments through downturns due to the lack of daily quoted dwelling prices.
Note, however, how these perceived benefits can also be disadvantages in disguise for the unwary.
In other words, those who 'get it wrong' can be burned savagely by these twin characteristics of real estate by (a) borrowing too much, and (b) holding on to a heavily leveraged asset which experiences a long, slow deflation in price or market value.
This article continues on the next page. Please click below. 
<hr class="system-pagebreak">
Example?
I'm not sure how much value there is in including a stylised example here, since property investors tend to be more focused than diversified and thus returns are heavily dependent on correct asset selection.
For example, I'm extremely grateful to be a property owner in <a href="https://www.dailymail.co.uk/news/article-2660654/The-house-gained-800-000-three-years-Huge-increase-price-home-South-West-London-latest-example-capitals-booming-property-market" target="_blank">south-west London, where prices are continuing to appreciate in a near-parabolic fashion</a>, but one suspects you'd have found few young owners of a sunny disposition in regional UK real estate over the past eight years.
In any event, where a capital growth rate of 6% per annum on a property is experienced over a 10 year period - which well-located capital cities properties have often achieved during the last couple of decades - this would have broadly turned a $500,000 house into a $900,000 house over that 10 year time horizon.
Assuming an initial investment comprising a 10% deposit of $50,000 plus, say, $25,000 of closing costs including stamp duty, transfer and legal fees, a compounding annual 6% capital growth created equity of an outlandish $450,000.
That is to say, mortgage debt remaining at $450,000, a property valued at $900,000 and correspondingly, equity of $450,000:
<div class="separator"><img src="https://3.bp.blogspot.com/-dVUboAO9RQc/U6TwO0diP5I/AAAAAAAAN9Q/Zq68S48NFfc/s1600/Resi.jpg"></div>
In other words, ignoring for the sake of simplicity any holding costs (due to low gross yields well located residential property may generate negative a cash flow in its early years before generating a positive income later in the life of the investment), you may have recouped your initial investment of $75,000 some six times over in a decade, a level of return on investment of closer to 20% per annum on the initial cash outlay.
That is to say, a rate of return that has simply not been achievable in another asset class with an equivalent level of risk for the average investor.
How has this ever been so? 
The main reason is that residential property mortgages have a unique triumvirate of conditions attached, as I discussed in greater detail in my piece <a href="https://petewargent.blogspot.com.au/2013/05/the-basic-characteristics-of-property" target="_blank">"The basic characteristics of property as an investment" here</a>:
<ol>
<li>Loan terms of up to 30 years...or even longer;</li>
<li>Low borrowing rates;</li>
<li>Low required deposits.</li>
</ol>
Will there be a property downturn in the next decade? 
There will. In this era of lower inflation, dwelling prices will actually fall in value in nominal terms far more often than than they have done in decades gone by.
Indeed, we have already seen this happen in the past decade, with prices falling in nominal terms in several calendar years.
Due to the high level of transaction costs, investment property should ideally therefore be held over a period of more than two decades, in my opinion. 
I only can wish that I had a dollar for every time someone asked me about their property's lack of 'performance' over its first year or two...
Summary
In summary, two very different asset classes that are nigh on impossibly difficult to compare in any meaningful manner.
It is possible to use significant leverage in the share market too, but unfortunately very few investors manage to achieve this with the requisite level of skill.
In the last decade, in theory you could have made a motza by leveraging heavily into the share market, but in reality, most - at the risk of committing the cardinal sin of verbing my nouns  - would have been margin-called out during the 2008 crash.
<div><img src="https://hfgapps.hubb.com/asxtools/imageChart.axd?s=xjo&amp;pi=Index&amp;ct=3&amp;tf=M10&amp;ovs=&amp;si=Code%20not%20supplied&amp;tima1=0&amp;tima2=0&amp;bi=2&amp;bima=0&amp;comt=index&amp;ds=xjo&amp;dovs=0&amp;ex=ASX&amp;ex2=ASX&amp;val=1&amp;stmp=20140621115343362" width="400" height="275"></div>
Smart equities investors who kept their powder dry borrowed against the homes at low mortgage rates in 2009 to pick up parcels of shares in wonderful companies such as Wesfarmers (WES) and Commonwealth Bank (CBA) when they were trading at incredibly cheap Price/Earnings (PE) ratios and the market was "on sale".
In this way, share market returns can also begin to escalate massively, but for various reasons it seems to be the case that only a select few manage to pull this strategy off with any real panache.
The truth is that equities are a wonderful asset class for those who learn to treat shares as an income asset and derive their benefit from the ever-increasing tax-advantaged dividends with franking credits. 
Instead, most seem to ask: "Which shares are going to go up soon?" focusing exclusively on price action and indulge themselves in the endless and fruitless conjecture of market commentary, which is somehow miraculously to divine which direction the market will move in next.
You can visit <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) or Pete's <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blog</a>.
His latest book is '<a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>' .
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Property or shares - which is a better investment?

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Good Negotiators see lies as actions
What is it we are trying to do? Reach an agreement.
Why is the agent lying to us? To reach an agreement – hopefully with us!
Lies can be very positive things
<ul>
<li>They can be an attempt by the other side to get a connection which they hope will lead to an agreement – they show a willingness to treat.</li>
<li>They are often a way to the truth if that is what you seek</li>
</ul>
Lies are actions designed to get a connection that otherwise (in the opinion of the liar) may not have happened.
Good Negotiators are looking for connections, even with liars
Connection – is the first and last step of any deal. Without connection you have no deal. Connection is the key ingredient of an agreement, more so than price.
Price is a figurative expression, the end product, of a connection of minds that have formed an agreement based on perceived facts and the actions of the parties.
A well-executed lie can get a connection – how many people don’t bid until there is another “offer”, but then bid under threat of one and a deal is struck.
A poorly executed lie can destroy a connection – the buyer will pay the asking price and probably more, but just doesn’t. Why because they don’t trust the agent, based on previous perceived lies and so moves onto another home.
But we’ve found its not always the lie that breaks or prevent the connection – it’s the reaction to it that does.
Good Negotiators and the blunt instrument
If you cannot get connection in a negotiation then you are forced to use a blunt instrument until you get a connection.
And that blunt instrument is?
No, it’s not a club or a fist – its cash.
That’s expensive to you or your client.
Buyers most affected by liars.
<ul>
<li>Out of the market for a long time</li>
<li>Interstate and overseas and different cultures</li>
<li>Not business orientated or</li>
<li>Buyers with egos not suited to best dealing with agents</li>
</ul>
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Good Negotiator and the moral high ground
Creating that connection isn’t best served by creating an emotional response and putting yourself on the moral high ground above those ‘lowly” agent liars. You might feel better able to defend yourself against the lies, but it also lessens your chances of connection.
Have you never said something or changed your mind, in an attempt to influence, that you think might be or you know to be different from what you have said. Are you really all alone on that moral high ground?
In Melbourne home buying you are a further away from the action when you are on the moral high ground and that means less chance of connection.
And remember the lesser the connection, the greater the use of the blunt instrument (cash) or you miss out.
Don’t let lies drive you to the moral high ground without due consideration.
Good Negotiators have very few attachments
Yes all buying and selling agents have heard the line “I’m not attached to this home”.  Most times when this is said a neon sign miraculously appears above the speaker’s head and its flashes: Liar, liar pants on fire – I am actually really attached to this home.
The better negotiators, whether liars or not, are good connectors; but they have little emotional attachment to a number of the things they say and you say.
In professional negotiation we have found if you limit the attachment, you limit the emotion and then you minimise the hurdles to connection between the parties.
Non-attachment is not a concept determined by the spoken word. It’s determined by an emotional feeling and only the very skilled can disguise their attachments from professional negotiators.
Paradox: Non-attachment is a characteristic of a good negotiator but also a characteristic of a good liar.
Good Negotiator and reading the play
A lie is good when you are the other side’s intended target of the deal and you read it correctly.
A lie is bad when you misread the lie and/or you are not the other side’s intended target of the deal.
Good negotiators can for the most part read the differences between a lie and a truth.
We (James Buyer Advocates) don’t get every nuance, every subtle ploy exactly right when dealing with liars and we don’t need to – because to do so means the experienced negotiator is focussing on the minutiae. Good Professional Negotiators always have an eye on the big picture – the client’s desired outcomes.
Good Negotiators carry a big stick (if they can find one)
Good negotiators carry a big stick in dealing with liars – please don’t read into this article that we are saying good negotiators should acquiesce to liars and accept lies.
Good negotiators don’t condone lies – after all its not an efficient way for a market to operate.
The big picture – good negotiators hit back in a timely manner (where appropriate) where a lie can be used against the liar. Many, many times a lie designed to increase the price actually lowers it – when used well against the liar by a professional negotiator.
But good negotiators don’t focus on hitting back at the expense of the client’s desired outcomes.
If we are lied to and it’s appropriate (to our clients benefit) we will return a lie with interest, but we don’t do so in a highly charged emotional state.
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Good Negotiators &amp; TRUST – lying is not the only way to deal
A number of the better agents, be they buyer or seller agents, do not “materially” lie to their clients – they really don’t.
I’m not on the moral high ground here – its purely business. It’s never a good battle strategy to have mistrust within your own ranks. We don’t buy around 85% of the homes we go after at auction and over 90% of the homes at EOI because we are perceived as liars to our buying clients.
And we didn’t buy over 100 homes in 2013 around the $2 million to $4 million mark because we lied to those above same very experienced selling agents or they lied to us on a regular basis. A number of professional deals between experienced and competent negotiators are based on a healthy amount of trust and to be trusted you cannot lie (to your advantage) on a regular basis to those you represent or deal with (and get away with it).
You may have noticed that we have deliberately avoided a specific definition of what constitutes a lie – we have circled around it. Why? In our opinion, a unilaterally agreed definition of a lie is not the main game in Melbourne home buying. Is it a lie or is it bullshit and is their a difference? It is not important whether or not you and I think that a particular statement is a lie. If you perceive it is a lie, then for all intents and purposes it is a lie to you.
Healthy trust – is not blind trust – scepticism and independent, competent due diligence must always be part of the armoury of a good professional negotiator – after all the other side’s desired maximum outcomes are rarely the same as yours.
So for every liar and deal done on a lie there are many more we do with truth tellers and deals done on truths.
Good Negotiators and culture
In our early days of multi-cultural and international dealings we would get upset if things didn’t go the way for our clients we wanted them to go. And as you know, being upset means getting emotional, which leads to body changes and this was not in our future clients best interests. So we changed. 
As previously stated, successful negotiators often look on a negotiation as a battle situation – they might follow Sun Tzu’s teachings – he would consider as positive, a deceitful move on the enemy if it resulted in a victory.
Different cultures have different ways of looking at what happens within a negotiation.
<ul>
<li>When I’m dealing with Indian sellers, agents or clients, for instance, I perceive it to be a moving goalposts culture.</li>
<li>When I’m dealing with Chinese people the goalposts seem to be very firm – but sometimes it takes me a long time to find where those goalposts are.</li>
<li>Both of those cultures operate in a different way to my Anglo-Christian upbringing – which lets face it has a far from perfect historical past in negotiations.</li>
</ul>
To say everybody who thinks differently to you is wrong and a liar will really only hurt one person in Melbourne home buying – you; or in our professional case, our buying client.
The same goes for the agents' culture. Each real estate agency in Melbourne has its own particular culture and there are huge cultural ‘moral’ rule differences between those companies.
RT Edgar is very different from Kay and Burton and Jellis Craig is different from Marshall White – they all have their own way of operating with people on the other side of their fence (you the buyers).
And as buyers you really need to understand that many agents do not perceive what they do to you as morally wrong and who’s to say which actions are and which aren’t?
Lies or perceived lies are endemic within the Melbourne property market.
Some may say all agents are liars.
Some may say all humans are liars.
The recognition of a lie can affect your body and mind chemically and make you react in ways detrimental to your best interests.
If you want to maximise your options and ultimately your longer term outcomes when buying in $1 million plus Inner Melbourne in 2014 then we feel you need to have an understanding of lies when dealing with agents and multicultural negotiations.
If you cannot deal with lies then your alternatives may well be limited to offering more cash or to missing out.
So don’t get mad or get even, get what you really want!
Stay focused on your longer term emotional, financial and physical outcomes above all else.
At times lies us affect us all – but its the circumstances that surrounds the lie and our reactions to it, rather than the initial lie itself which ultimately determines the damage it does to us.
Mal writes weekly auction reports, advice and in-depth market analysis on <a href="https://www.jamesbuyeradvocates.com.au/" target="_blank">James' website</a>. 
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How good negotiators deal with liars: Home buying in the Melbourne property market

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Somehow when we talk about the biggest phenomenon in Inner Melbourne home buying, Chinese nationals, their spending power and the apprehension that is increasing out there among some home buyers when competing against overseas buyers, we get diverted from the main game.
The main game, in our mind, is not the Chinese nationals themselves. It is how they as a group have been changing the face of Melbourne home buying, particularly since 2009, and how you need to deal with the associated price issues that overseas wealth (demand) and reducing housing stock (supply) will have on you and/or your children’s current and future home buying plans.
What has been happening in the market in the last five years (post-GFC) <a href="/expert-insights/investing/chinese-buyers-in-melbourne-a-simple-case-of-supply-and-demand">is more about demand, supply and price than about Chinese nationals</a>. Big picture-wise, the price and supply changes we are seeing would have happened eventually due to organic population growth. However, right now the overseas market, and in particular the wealth and actions of Chinese nationals, are significantly accelerating the price and supply issues through their demand.
<blockquote>
Overseas buyers are not buying every home, everywhere. Their effect is much more like a snowball rolling down a mountain; in some markets this has turned into an avalanche, whereas in others it is still just a small snowball rolling down a mountain.
</blockquote>
As home buyers you need to deal with this, just as you need to deal with agents, auctions and other nuances of the Melbourne market.
Overseas buyers are not buying every home, everywhere. Their effect is much more like a snowball rolling down a mountain; in some markets this has turned into an avalanche, whereas in others it is still just a small snowball rolling down a mountain.
The effect of overseas buyers is best evidenced by the different strengths and bidder depth in the Inner East markets versus the Bayside markets.
The Inner East market is where Chinese national bidding is the most significant.
<ol>
<li>Inner East had a far shorter GFC period in 2008/2009 than Bayside</li>
<li>Inner East had minor price drops compared to Bayside in the GFC and in 2011/12</li>
<li>Inner East has stronger price per square metre land prices across the board (except absolute <a class="st_tag internal_tag" href="/news" title="Posts tagged with Brighton" rel="tag">Brighton</a> waterfront)</li>
<li>Inner East has changed streetscapes in many areas. with new builds specifically aimed at the Chinese national market, e.g. <a href="/news">Balwyn</a> and <a href="/news">North Balwyn</a>.</li>
</ol>
Short-term and understanding the changing market nuances
As buyers you need strategies to compete against wealthy overseas buyers now and to buy well generally now. You also need to understand as buyers that EOIs are set up in a number of cases for Chinese nationals and other overseas buyers. You need to manage that if the home you want to buy is being sold through an expressions of interest campaign.
You need to understand how Chinese nationals and other overseas buyers value land and buildings, so you can compete effectively.
You need to understand how different cultural influences affect private sale and EOI negotiations and you need to know how to prepare and bid at auction when competing against overseas buyers.
If you don’t, or your strategy is to wait, then we think you may have issues, as we have tried to illustrate in the above diagram.
But it’s not just about you buying a home now. What effect will this significant influx of wealth have on your children buying homes?
Longer term solutions and a different strategy
As buyer advocates, a large part of our business has always been buying generational homes for families to live in and pass on. We have acted many times for local and overseas clients, including Chinese nationals, with this as a key desired outcome.
An increasing market segment for us (with a slightly different take, but same desired outcome) is the purchase of smaller, well-located family homes through super funds.
These $1 million plus homes are bought as quasi-investments and sit in super funds with the view they can return some cash and provide some growth in the medium term; but ultimately they are purchased for our client’s children as a hedge against being priced out of the market.
Generational Homes for you and your children
Personally my family lives in a three home estate in Brighton with grandparents and parents and children. This has been set up like this to assist future generations to remain in the area (if they so choose).
It was relatively easy for my generation in the 1970s and 80s to move from Outer Melbourne (Doncaster was then Outer) to Inner Melbourne (Malvern then Brighton).
But how easy will it be for our children to find a home? Our children may well be the first generation that is living in poorer accommodation as adults than they grew up in as children.
Unless our children are rocket scientists with an entrepreneurial bent, or they get parental help, they will be moving further away from Inner Melbourne on affordability grounds. Or they will be living nearby but in apartments.
In moving further away from Inner Melbourne your children will also be moving further away from infrastructure, transport, school choice, the footy, restaurants and you.
We suggest you develop strategies now.
We are not for or against overseas buying, just as we are not for or against first home buying grants or for or against negative gearing. Our job is not to debate. We see our job as raising the issues and helping our clients find solutions. We are buyer agents operating in the Top End marketplace.
We feel this best helps you, the buyer, consider your options now and into the future.
Mal writes weekly auction reports, advice and in-depth market analysis on <a href="https://www.jamesbuyeradvocates.com.au/" target="_blank">James' website</a>.
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Strategies to compete with overseas buyers

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The global financial crisis (GFC) caused many investors to re-think their strategies and while property investors managed to protect themselves more than others, property funds require specific attention.
AMP Capital’s Mark Ferguson head of Australian listed real estate and Christopher Davitt fund manager, wholesale Australian property fund, recently identified their three post-GFC lessons that all investors considering parking their money into a property fund can consider.
The hunt for income is as relentless as ever, they noted, recently evidenced by <a href="/expert-insights/finance/number-of-investment-property-loans-jumps-by-37-since-2010-roy-morgan">Roy Morgan’s stunning statistic of a recorded 37% uptick in investment property loans since 2010</a>, the current low interest rate environment and low bond yields, which contrasted with strong forecasts for Australian property, may cause this number to surge even higher.
<blockquote>
“Strong capital into the sector should translate into further price increases, which should support capital appreciation and grow future earnings over the long-term."
</blockquote>
In fact, they noted that they expect Australian property to continue providing strong, reliable income streams for investors, particularly as the appeal of property is based on the stability of income despite rises and falls in capital values.
The strength of rental agreements in maintaining yield is a very positive factor. "These are generally signed on a long-term basis, so the cash flow of rental income is 'locked in' for a predetermined period,” they explained.
"The housing story keeps improving on the back of lower interest rates and foreign investment,” they said, with <a href="/news/urban-taskforce-warns-against-xenophobic-review-of-chinese-investment-by-federal-government">foreign investment so strong it has now attracted official scrutiny</a>.
"Housing approval rates are up and capital-city auction clearance rates remain elevated despite high-profile company closures and job losses.
“Strong capital into the sector should translate into further price increases, which should support capital appreciation and grow future earnings over the long term."
They provided three investing tips, re-enforcing the concept that property requires a long-term investment outcome focus.
<ol>
<li>
Ensure you conduct research. Look into a property fund's track record and "stick to fund managers with an established reputation and sound history". 
</li>
<li>
Check that the gearing levels are not too high. As some property funds look to borrowing capital as a necessity to boost their potential investment returns, which is a technique known as gearing, it's worth remembering that it magnifies the potential for both gains and losses. Everyone's comfort with this differs, so ensure that the gearing levels are not too high for your risk profile. 
</li>
<li>
Understand underlying risks. Each fund holds different investments that contain a different amount of risk, and you must be aware of the underlying risks of the fund you are considering. Be "mindful that funds investing in a single asset carry more risk than those that invest in a portfolio of properties". They also suggested that investors be wary of properties with complex business models where there is a cross-collateralisation of debt.</li>
</ol>
In the long-term future, AMP Capital predicts direct property and Australian listed property to deliver robust income returns.
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