Perth’s new apartment market recorded its strongest quarter of sales since Q4 2021, with 412 apartments sold in Q1 2026 and a record quarterly sold value of $537 million, according to Urbis’ latest Apartment Essentials results.

Urbis said the March quarter result reflects strong, highly product‑specific demand across both ends of the market, from more attainable projects delivering at scale, through to premium stock being absorbed by equity‑rich downsizers.&nbsp;

David Cresp, Partner at Urbis, said the key story in Perth is not demand, it is the market’s ability to convert demand into delivered housing.&nbsp;

“This is the strongest sales quarter since Q4 2021, and it reinforces that demand in Perth is real and it’s local,” David Cresp said. “But the task now is delivery, turning that demand into projects that can actually be built and completed.”&nbsp;

[smartcode_project:default project_id=110291 project_image_fid=302785]

<h2>Affordable product leads, premium demand remains resilient</h2>

Sales in Q1 were led by more affordable projects, with The Boulevard (SKS Group) recording 115 sales in the quarter, the presentation noting this is only the second time a single project has surpassed 100 quarterly sales. The project was able to offer more affordable housing product right next to a train station.&nbsp;

Palmyra West (Finbar) also delivered strong results with 28 sales in Q1, following 84 sales in Q4, with an average price of under $800,000, underscoring depth of demand for well‑located, attainable new stock.&nbsp;

At the premium end, Urbis said downsizer demand is continuing, with the results highlighting Romeo (Applecross, Finbar) recording 75 sales and reaching almost 50% sold in one quarter.

Jual (Shenton Park, Celsius Property) also posted a strong quarter with 28 sales, reaching 39% sold in one quarter.

Urbis noted that Perth apartment demand is not speculative, not investor‑led, and not uniform, describing it as localised, often equity‑driven and highly product‑specific, a pattern reflected in the polarisation between strong “attainable” performers and premium downsizer product.&nbsp;

[smartcode_project:default project_id=148957 project_image_fid=364102]

<h2>Prices underpinned by costs, and the delivery risk is growing</h2>

Urbis said pricing pressure is cost not demand‑driven: construction costs and delivery risk are now a central constraint, with the results noting build costs remain elevated and volatile, and that energy, fuel and labour uncertainty weigh on feasibility.

David Cresp said a growing challenge for private Build‑to‑Sell developers is simply securing a builder in the current environment.

“Developers are really feeling the pressure from a building market that was operating at capacity and securing a builder is challenging,” David Cresp said, adding that even where a builder can be secured, “trying to get to the price that makes the development financially viable is incredibly challenging in the current market.”&nbsp;

Urbis’ broader WA commentary also notes that industry remains at or above capacity with lot and housing creation, and that many builders are limiting new sales to manage stretched workforces and fixed‑price contract pressures, conditions that flow directly into apartment feasibility and delivery timing.

[smartcode_project:default project_id=108869 project_image_fid=317905]

<h2>Supply: improving later, but still constrained, and Perth lags eastern benchmarks</h2>

While near‑term supply remains constrained, Urbis’ forecast shows completions lifting “Supply is forecast to be back above 1,500 apartments per annum for the first time since 2019”, with 1,775 completions forecast for 2026, and volumes remaining above that level over the following years.&nbsp;

Looking further ahead, completions are forecast to reach 2,500 in 2028, with the report noting 32% of that total is social/affordable, reflecting the role of government‑supported delivery in rebuilding the pipeline.&nbsp;

However, Urbis said Perth remains behind comparable markets on pipeline scale. In a national comparison of projects under construction, the report shows under construction Perth Build‑to‑Sell (BTS) at 3,446 apartments versus the Gold Coast at 7,922. Mr Cresp said “The challenge for Perth is how to we grow the delivery pipeline”.

Urbis’ conclusion is that Perth’s market is increasingly defined by product discipline and delivery certainty, with the research identifying “delivery certainty is key” and calling out builder risk and procurement models as core success factors, alongside “timing and staging”.&nbsp;

Joel Robinson

Perth apartment sales hit strongest pace since late 2021 as builder capacity tightens

<a href="https://www.apartments.com.au/developers/sammut-developments">Sammut Group</a> has secured development approval for its latest Brisbane apartment project, marking the Sydney developer’s next step in expanding its Queensland pipeline following the success of its debut Gold Coast development, Coast.

The approved project at <a href="https://www.apartments.com.au/new-apartments/44-glen-road-toowong-qld-4066">44 Glen Road, </a><a href="https://www.apartments.com.au/developments/toowong-qld-4066">Toowong</a> will deliver a 15-storey riverfront apartment building with 42 residences, significantly increasing the scale of the site’s previous approval for a smaller luxury scheme. Designed by Bureau^proberts, the development will comprise a mix of predominantly four-bedroom and two-bedroom apartments positioned to maximise Brisbane River and city views.

Sammut Director Julian Sammut said the group had been actively searching Brisbane for several years before identifying Toowong as the right fit.

“Brisbane was the right step for Sammut,” Sammut said.

“With the success of Coast we thought we should definitely look to do more in Queensland alone. We then pushed up to look at Brisbane. We've been looking for I'd say two to three years actually and it was hard to find the right location.”

<img alt="Sammut makes Brisbane apartment play" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/f_auto,c_limit,w_1440,q_75/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/field/image/Screenshot%202025-12-23%20at%203.27.14%E2%80%AFPM.png?VersionId=dYAVIL7qdcGA8ojvkslSrLjczXFejSSx" />

Sammut said suburbs including New Farm and Teneriffe were considered before the group ultimately focused on Toowong due to its strong downsizer demographic and limited supply of developable riverfront land.

The site was acquired off-market after what Sammut described as a lengthy negotiation and planning process, with the developer pursuing an uplift to the original approval.

“We are DA approved now which is very exciting,” Sammut said.

“We've had our change approval come through and we've obviously doubled the height, 15 storeys plus rooftop. We've got 42 amazing apartments that are going to be coming to market soon.”

<img alt="Sammut makes Brisbane apartment play" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,dpr_2.0,q_auto:good/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202025-12-23%20at%203.27.26%E2%80%AFPM.png?VersionId=ohkRkY0dIZlqdfME2EZePsCQavRiBadE" />

Bureau^proberts said the design responds to Toowong’s evolving urban character, balancing contemporary apartment living with the area’s established residential identity.

“A place where traditional Queensland living has taken place for centuries; Toowong is seeing a shift of contemporary influence, commercial and retail hubs mixed with well-considered residential offerings – all the while maintaining its character and charm,” the architect noted in planning documents submitted to Brisbane City Council.

The architecture practice said the project’s form was shaped by its riverfront setting, flood considerations, neighbouring building scales, and view corridors.

“They said the mix of four and two-bedroom apartments capture the ‘fundamental qualities of Queenslander living,’ translated into the context of a contemporary subtropical building.”

The development sits just off Coronation Drive within walking distance of Toowong’s retail precinct and the upgraded Regatta ferry terminal, while also benefiting from proximity to the incoming green bridge connection to West End. Sammut said the accessibility and amenity offering were central to the site’s appeal.

The approval adds to growing residential activity along the Toowong riverfront, joining nearby projects including Consolidated Properties’ Monarch Residences and Spyre Group’s ARC Residences.

Sammut secures approval for debut Brisbane apartment development in Toowong

Developer Lanevick is heading back into Sydney’s apartment market after focusing more heavily on the luxury townhouse and terrace sector in recent years.

Lanevick, founded and directed by Steve Maroun, is expecting to receive approval in the coming months for a new apartment development in Gladesville, with the aim to launch it to the market later this year.

The 51-apartment project, designed by Studio Johnston, will comprise a mix of one-, two-, and three-bedroom apartments positioned toward the Hunters Hill downsizer market.

“Traditionally it’s been difficult for people in that market to downsize because there just hasn’t been the right product available,” Maroun said.

“We’re targeting buyers who might have 30 to 40 per cent of their house value sitting in the bank after downsizing.

“They still want good spacious entertaining areas, they still want quality design, but they also want flexibility and the ability to enjoy life a bit more after working hard for a long time.”

The project sits near Boronia Park and within close proximity to the Parramatta River foreshore, an area Maroun says offers more of a Hunters Hill lifestyle than a traditional apartment precinct.

“From a lifestyle perspective, it’s really more Hunters Hill than Gladesville,” Maroun said. “You’re close to the foreshore, close to parklands, and still connected back into the village precinct.”

From level four and above, apartments will capture water views&nbsp;toward Sydney Harbour. Communal amenity will include rooftop entertaining areas, wellness spaces, and a gym tailored toward owner-occupier buyers.

“We’ve really designed these apartments around that buyer coming from the Hunters Hill LGA and what they’re actually looking for in their next chapter.”

The proposed development has also been designed to respond to the changing character of the broader Gladesville town centre, where a growing number of mixed-use and residential proposals are expected to emerge over the coming years.

“Gladesville presented a rare opportunity to deliver a genuinely design-led residential project within an evolving lifestyle precinct, just moments from the growing Gladesville town centre, and we’ve approached the project with a strong focus on architecture, liveability and long-term community value,” Maroun said.

Maroun said Lanevick saw a first-mover advantage within the precinct as planning controls continue to evolve to accommodate greater housing density.

“We think there’s a real opportunity there that hasn’t really been serviced properly yet,” he said.

“There’s going to be a broader evolution of the whole Gladesville village precinct over time, particularly with more activation and mixed-use outcomes.”

The Venus Street proposal will include a commercial and retail component at ground level designed to contribute to that evolving streetscape activation.

“A big part of the thinking was how do you activate that area properly and create more vibrancy and amenity, which is what Hunters Hill has been looking for,” Maroun said.

Lanevick’s focus since 2020 has largely been on smaller-scale luxury townhouse and terrace developments. The developer recently completed Royale Randwick, also designed by Studio Johnston, where prices reached $3.65 million. The project was featured in the UDIA NSW 2026 Professional Development Prospectus and was also named a finalist for Development of the Year.

&nbsp;

Lanevick to cater for Hunters Hill downsizers with new Gladesville apartment development

Property developer One Living, backed by former Macquarie banker turned investment manager Chris Green’s investment firm, has unveiled plans to bring more institutional capital into housing to help address the national supply crisis.

The New York-based investor has focused his firm, GreenPoint Partners, on addressing the supply shortage hitting middle market housing in Australia.

It is backing the new One Living business to develop more than 1000 units along the eastern seaboard. The new firm is starting with a development on Mona Vale Road, on the border of Mona Vale and Pymble, in Sydney’s Northern Beaches, with around 140 apartments planned. They are eyeing off more sites across the city.

With cost pressures rising in the industry, One Living’s model is to be a vertically integrated developer-builder, so it can respond directly to the housing gap by removing the cost inefficiencies embedded in traditional residential delivery.

“We are building a platform designed to operate at scale and starting in a market where there’s a clear need for quality, attainable housing,” One Living joint managing director Joseph Scuderi said.

“It’s that missing middle – it’s that attainable end of housing… that’s what most Australians invest into and what Australians can actually afford.”

<img alt="Mona Vale" data-entity-type="file" data-entity-uuid="798dfa93-4941-4db6-a696-31e9dc18e81c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%202.31.50%E2%80%AFPM.png?VersionId=mKBqi5C_DmeiXS.AtJkcR8LQIxqCqmFi" />

GreenPoint Partners brings years of experience assembling and scaling real estate operating businesses across major markets. And Green sees a big opportunity in Australia.

“For its size, sophistication and importance to the community, Australia’s living sector has remained largely under-institutionalised, which represents significant opportunity,” Green said. “GreenPoint identified that gap, assembled the right team, and is backing One Living to build a platform that is aligned to market needs.”

Green said being a builder-developer would give the company the capacity and flexibility it required to deliver reasonably-priced homes.

“We want it to be at that attainable level; not super high end luxury but at that attainable level,” he said.

<img alt="Mona Vale" data-entity-type="file" data-entity-uuid="74a5344a-4b26-4d4a-ada3-056b1220be77" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%202.32.15%E2%80%AFPM.png?VersionId=vY8hXHO4reBMdO8ZXMWCNtGZJofUPQ3j" />

&nbsp;

One Living will undertake a component of affordable housing in its schemes, which it will own and operate, and it could also run build-to-rent on some sites.

Green praised local policy settings.

“The NSW government is being very supportive, strategic and pragmatic in terms of how do we generate more supply of housing,” he said. “We think it’s actually positive for development and the bit that’s been lacking at that attainable level is that it’s lots of relatively small private developers, whereas we want to create an institutional platform.”

One Living is also&nbsp;looking at high-density projects and could take on more institutional funding in the future.

“The way we will be able to achieve economies of scale is through size,” Green added.

One Living enters Sydney's new apartment market with Northern Beaches site acquisition

It's been several years since there's been an opportunity to buy a brand new townhome in Melbourne's coastal suburb of Mordialloc. Even apartment developments in recent times have been few and far between in the area.

Local developer LDS Property identified the gap in new housing, securing a site on White Street, directly opposite&nbsp;Woodlands Golf Club Mordialloc. They've recently launched&nbsp;<a href="https://www.apartments.com.au/new-townhouses/wm-residences-mordialloc-102-white-street-mordialloc-vic-3195">WM Residences</a>, just 13 townhouses which they have already started building.

Projects by Buxton Director Heath Thompson, who is selling WM Residences, says the townhouses x that perfect middle ground be

"Mordialloc residents have had limited options to downsize within the suburb, often forcing them to look elsewhere despite long-standing ties to the area," Thompson says.

"With very little comparable new supply coming to market, projects like WM Residences are well placed, particularly as buyers look to capitalise on current conditions amid constrained supply."

[smartcode_project:default project_id=134646 project_image_fid=6109]

The development, designed by regarded architecture firm&nbsp;<a href="https://www.apartments.com.au/architects/ewert-leaf">Ewert Leaf</a>,&nbsp;adopts a deliberately restrained architectural approach, focusing on simplicity, durability and liveability rather than overt design gestures.

The boutique scale is central to the offering. With only 13 three-bedroom residences, each home is configured to prioritise functional layouts and everyday use, supported by private terraces and secure two-car garages.

Ewert Leaf’s design response leans into a calm, neutral material palette. Interiors are defined by oak flooring, white walls and soft finishes, creating a consistent and understated backdrop. The approach avoids trend-driven detailing in favour of longevity, with an emphasis on natural light and spatial clarity.

[smartcode_project:default project_id=134646 project_image_fid=6110]

Beyond aesthetics, the homes are designed to meet contemporary performance expectations. Each residence targets a minimum 6-star energy rating, incorporating double glazing, comprehensive insulation and all-electric Bosch appliances.

The project’s location supports a walkable coastal lifestyle, sitting within close proximity to Mordialloc’s foreshore, Main Street retail strip and the train station. Local cafés and dining venues, including Suburbia Deli and Hendriks Café, are within a short walk, reinforcing the area’s established neighbourhood character.

[smartcode_project:default project_id=134646 project_image_fid=6116]

While <a href="https://www.apartments.com.au/developments/mordialloc-vic-3195">Mordialloc</a> is often defined by its beach and pier, the project taps into other areas of day to day living, offering easy access to local food, casual dining and transport, rather than positioning itself purely as a lifestyle retreat.

WM Residences reflects a continued trend across Melbourne’s coastal suburbs towards smaller-scale, design-led townhouse developments, particularly on infill sites where proximity to amenity is already established.

With construction commenced prior to its market entry, the project aligns with a growing preference among buyers for developments with visible progress and defined delivery timeframes.

[smartcode_project_cta:default project_id=134646]

WM Residences fills gap in Mordialloc townhouse market

Strategy

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Ego and Confirmation Bias
The other day I bought a parcel of shares in an industrial stock for $1.10, the share price zoomed up to above $1.20 in double-quick time, but then the price fell back to my entry point at $1.10 and I was stopped out with short shrift. 
I know beyond the shadow of any doubt that when I was 25 I would have let the price fall well below my entry price before even thinking of selling, and then hoped for it to 'come back'. 
It's an ego thing; you never want to admit to making a poor selection.
By the time I turned 35 I'd learned that if you want to be a successful share trader you must have the discipline to cut your losses and let the winners run (rather than precisely the opposite, which is what most losing traders do).
Even the best stock pickers might select perhaps four trades which don't co-operate from every ten. That doesn't make them bad trades, as such. You simply must be disciplined, and cut the losing selections ruthlessly, and 'trade right'.
<blockquote>
Property investors will likely still be able to attain strong enough returns over the longer term, provided they know in which locations and what property types to buy.
</blockquote>
The process is as important as the outcome. Twisting on 20 and getting an ace doesn't make one smart, only lucky. 
Ridding yourself of that pesky ego is vital to ongoing success as a trader. If you let the losing trades fall and fall in the vain hope that they one day come back to save you at break-even, eventually one of them will keep falling and wipe out all of the other accumulated gains in your trading account and then some.
Human nature dictates that it's very hard to admit being wrong. This is non-sensical: we all get things wrong all the time!
The only reason I reckon myself to be a half-decent investor today is that I've made no many balls-ups in the past - pretty much every mistake you can name, in fact, I've probably made it or a variation thereof. 
Indeed, making all the mistakes in the book is sometimes the only way to learn about what works and what doesn't, and to some extent it might be described as the hallmark of an expert investor - one who has made every mistake, but has resolved to learn the inherent lessons.
Capital growth
Is there ego in a lot of our property market commentary? Gosh, yes! 
How often do people admit to being wrong? Even when they've had a complete shocker and recommended speculating in mining towns where prices have since collapsed? Occasionally? Rarely? Ever?!
As I blogged about <a href="https://petewargent.blogspot.com.au/2014/02/error" target="_blank">here</a>, unfortunately for me, I've made mistake after mistake as an investor, although luckily a long-term outlook can be forgiving of errors.
It was Oscar Wilde who said: "Experience is the name everyone gives to mistakes." It's true. Mistakes are how we learn as people, and also as investors.
Inner suburbs, or outer?
There has been a long-running debate in Australia about whether capital growth is stronger in suburbs closer to the respective city centre (aye), or in outer suburbs (nay).
Clearly, historically, there is no debate to be had.
Median house prices in Sydney's inner suburb of <a href="/news">Point Piper</a> obviously did not get to exceed $5.832 million with moderate capital growth.
And, just as obviously, median house prices of $228,000 in <a href="/news">Spencer</a>, <a href="/news">Gosford</a>, or median unit prices in <a href="/news">Vineyard</a>, Hawkesbury of $162,000 are hardly representative of rampant dwelling price appreciation.
The price growth has necessarily been in some way inversely related to relative proximity to the city with its employment, infrastructure, amenities, and so on.
It's a debate we've had over and over again in London and the UK over the years. And every time we carry out research into the issue, the results are precisely the same. 
Regional price growth in Britain remains relatively poor, outer London suburbs show moderate growth, and prime central London continues to outperform massively.
<div class="separator"><a href="https://3.bp.blogspot.com/-cw6q9EaewkE/U3SXOFTYDbI/AAAAAAAANNA/78q1_e_z1TI/s1600/AWBE.jpg"><img src="https://3.bp.blogspot.com/-cw6q9EaewkE/U3SXOFTYDbI/AAAAAAAANNA/78q1_e_z1TI/s1600/AWBE.jpg"></a></div>
<a href="https://allenwargent.com/wp-content/uploads/2013/04/AW-LONDON-BE-SP13-031.pdf" target="_blank">Source: AllenWargent Buyers Eye</a>
Australia?
While it has been common knowledge in Aussie real estate that inner suburbs have demonstrated stronger capital growth over the long term, in the past 15 years or so there has sprung up a debate as to whether regional centres and outer suburbs might now be the outperformers.
Why would that happen? People working from home? People seeking to move outwards for a cheaper lifestyle?
Unfortunately, study after study after study shows that the answer is: no. It's not happening. Indeed, if anything, we seem to have the opposite problem.
Younger generations often want to live close to the city, even if they have to pay to rent or buy an expensive apartment to do so. 
What can happen, in my experience, is that cheap suburbs can get a sugar hit as they gentrify thus experiencing a spurt of capital growth, but over the long term price growth is stronger in better located suburbs closer to the city.
See <a href="https://petewargent.blogspot.com.au/2013/09/outer-suburbs-better-or-worse" target="_blank">here</a> and <a href="https://theconversation.com/can-lower-income-buyers-build-housing-wealth-too-18418" target="_blank">here</a> for the charts from AHURI which prove it, both over the long-term and across recent years too. 
The evidence is as clear as daylight, yet some will still cling to perming carefully selected data over short term time horizons in order to defend their arguments.
This article continues on the next page. Please click below.
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Inner suburbs are STILL seeing higher capital growth
And so to the RBA's Luci Ellis and her excellent presentation on Australian housing at a conference in Sydney last week, the full transcript of which you can read <a href="https://www.rba.gov.au/speeches/2014/sp-so-150514" target="_blank">here</a>.
Ellis started by highlighting how household debt has hit a plateau since 2005, which implies that Australian dwelling price growth in aggregate will be slower in the future, and far more closely tied to household income growth in the future than it has been in the past, when lending criteria were deregulated and a structural shift to lower inflation and lower interest rates took place.
I'd suggest, though, that property investors will likely still be able to attain strong enough returns over the longer term, provided they know in which locations and what property types to buy.
Ellis highlighted what I've discussed a thousand times, that being the geographical constraints on some of our cities such as Sydney, which is surrounded by ocean, national parks and mountains, as well as pointing out how exceptionally low the population density is in our urban locations.
We have spacious plots, large houses and relatively few people per square kilometre in urban Australia, which does little to help combat housing affordability in detached dwelling types. 
<img src="https://www.rba.gov.au/speeches/2014/images/sp-so-150514-graph3-small.gif" alt="Graph 3: Urban Population Density"> 
<div>Ellis also went on to discuss the concept of the Central Place model - which is akin to what I have previously referred to <a href="https://petewargent.blogspot.com.au/2013/11/bid-rent-curves-in-australia" target="_blank">here as the bid-rent curve</a> - it suggests that prices and rents tend to decrease as you move away from a city's central point. </div>
<img src="https://www.rba.gov.au/speeches/2014/images/sp-so-150514-figure1-small.gif" alt="Figure 1: The Central Place Model">
Although Australia's cities are not monocentric and do have smaller sub-centres, the RBA notes that when you look at the spatial pattern of employment in Australia, the single centre model "is not a bad fit".
That's correct and accords with what I have seen unfolding in Sydney. We do have employment centres such as Parramatta and Macquarie Park/North Ryde, but they remain very much secondary locations to the main event of the CBD.
We kind of already know all this.
Jobs growth, population growth and capital growth in residential property and much commercial property has been strongest near to the centre of cities in the past.
But what of the future? At present job density is much higher in the central city areas as the RBA's research shows. In fact, read this point from the RBA carefully:
"Population density is higher near the centres and declines rapidly: again, the scales on these graphs are exponential, so each darker shade is an order of magnitude higher density. 
"Some of the outermost districts still contain agricultural land and a good fraction of national parks, so it isn't surprising that population densities are low in these places. I find it interesting that even some middle-ring districts are not that much denser."
Job density: 
<img src="https://www.rba.gov.au/speeches/2014/images/sp-so-150514-graph4-small.gif" alt="Graph 4: Job Density">
And, for that matter, so is population density far more heavily concentrated on central areas:
<img src="https://www.rba.gov.au/speeches/2014/images/sp-so-150514-graph5-small.gif" alt="Graph 5: Population Density (Persons per square kilometre, 2011)">
That's all fairly inherently obvious, but what is more important is how are these trends changing over time.
"The power of the central place is even more striking if we directly contrast where the jobs are with where the employed people live...in all of these cities, the CBD is still the job magnet."
Aha! As I've been arguing forever and a day - yes, we have secondary employment centres in Sydney (and other cities), but no, they most certainly do not draw more jobs to them than the city and the respective central zones.
Firstly, job density is clearly increasing in central areas at a far greater rate than it is in outer areas:
<img src="https://www.rba.gov.au/speeches/2014/images/sp-so-150514-graph8-small.gif" alt="Graph 8: Change in Job Density">
And, secondly, which is more, the population is increasing in density in inner and middle suburbs at a much greater rate too.
RBA: "In fact, many of the inner areas have become even greater job magnets in recent years; some middle and outer areas added people, but not so many jobs, so their job-to-worker ratios actually declined."
<img src="https://www.rba.gov.au/speeches/2014/images/sp-so-150514-graph9-small.gif" alt="Graph 9: Change in Population Density">
This article continues on the next page. Please click below.
<hr class="system-pagebreak">
Impact on dwelling prices?
What people, I suppose, are often really interested in is how these demographic shifts impact dwelling prices.
The answer, concludes the RBA's research, as indeed does every other credible study undertaken on the subject for that matter, is that the ratio of inner ring to outer ring house prices is actually continuing to increase, and the ratio is notably increasing at the greatest rate in the largest cities.
Luci Ellis:
"Declining job-to-worker ratios in some of the outer areas mean that many people are likely to face longer commutes than before. 
"The trade-off between space and place is getting steeper. 
"Locating on the fringe is relatively less attractive than it used to be, and not only because the fringe is moving further out.
"You can see that trade-off in relative housing prices over time. Inner-ring properties have become more expensive relative to outer-ring properties in recent years. And the larger the city, the greater is that premium."
<div class="breakafter"> </div>
<img src="https://www.rba.gov.au/speeches/2014/images/sp-so-150514-graph11-small.gif" alt="Graph 11: House Price Gradient" width="400" height="319">
This trend has played out in all five of the major cities so the conclusion is inarguable on an aggregate basis.
The causation is simply a matter of increasing demand for living close to the city versus scarcity value.
A word of caution, though. This chart represents the ratios for detached housing only, which inherently tends to have a certain level of scarcity value, particularly in fully built out areas.
<div>If you're going to buy unit or apartment stock, look to those with an inherent scarcity value, which does not mean generic, over-priced high rise shoe-boxes which are purchased off the plan.</div>
Outer suburbs and regional centres are struggling
With a few exceptions, outer suburbs and regional centres are struggling across a range of metrics. Ellis again:
"Even social infrastructure doesn't easily follow population to the low-density fringes. Sydney's newest university, Notre Dame, could have chosen an outer-ring location where land was cheaper and it had more room to grow. 
"But instead it put one campus right next to two other universities not far from here on Broadway and another in Darlinghurst."
And on the challenges facing our regional centres:
"I also can't help noticing how difficult it seems to grow the smaller cities in this country relative to the bigger cities. With the possible exceptions of Newcastle, Geelong and maybe Bendigo and Ballarat, few centres outside the state capitals have many corporate headquarters or other job magnets. 
"These self-sustaining job magnets seem to be necessary to create the variety of job opportunities that would attract large numbers of former city dwellers. 
"Over recent years at least, these smaller centres had rates of employment growth and changes in employment-to-population ratios that were similar to or a little below those in the big cities, and a bit below those of inner-city areas. 
"At this rate, it will be hard for the smaller centres to start catching up with the bigger cities, relatively speaking. That means that if big-city housing prices should rise too high for some residents, smaller cities cannot provide alternative locations that are any more viable than they are today.
"Instead of jobs coming to people, at least some of the people have been coming to the jobs, enabled by the pattern of building. In recent years, not only is a lot of the new housing in infill developments, it is much more likely to take the form of high-rise apartments than in the past."
And so, yet another independent study concludes unequivocally that inner suburbs are more desirable, are magnets for jobs growth, have greater access to essential infrastructure and amenities, have higher population growth, are more self-sustaining and show higher residential property capital growth  - both over the long term, and over the last 8 years too.
<div>
RBA warns on regional jobs growth
As we've been highlighting for a long time, jobs growth has become very heavily focused on capital cities in Australia, which is in turn necessarily very concerning for the economic health of our regional centres.
Regional jobs growth has been lagging badly and this has an unpropitious effect on the respective localised economies.
Luci Ellis highlighted exactly this point.
It was noted that regional locations have been adding jobs at a slower pace than the capital cities, and that it is likely to become increasingly difficult for the regions to close that gap as regional centres are offering a lack of variety in job opportunities.
It's something I've witnessed first hand in Britain over the last two decades.
The <a href="https://petewargent.blogspot.com.au/2014/03/zipfs-law" target="_blank" style="line-height: 1.3em;">large cities become more self-sustaining over time</a> while so many regional centres struggle to develop their economies at anything like the same speed.
The result over time can be a mass migration to the capital cities in the absence of specific policies to reverse these trends.
Summary
The debate about whether inner or outer suburbs will thrive will drag on, of course, since that is the very nature of confirmation bias.
But the conclusions drawn by the RBA and independent research institutes are about as black and white as it is possible to find.
Ships will sail around the world, yet "the Flat Earth Society will continue to flourish"...yet those listen to what the data is clearly telling them rather than continue to rally in vain against it, will prosper.
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 new book '<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>' is out now.
</div>
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pwargent-M4siyDbqQY

City centre v outer suburbs: Which will provide greater capital growth?

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Winter’s start is set to see strong real estate sales results thanks to strong April appraisal figures, according to property group Raine &amp; Horne.
April’s national average property appraisal figures were up by more than 21% from February.
Angus Raine, executive chairman and chief executive of Raine &amp; Horne says that appraisal figures are an indicator of the level of sales strength two or three months down the track. According to Raine, a significant proportion of buyer activity can be traced back to record low interest rates, improved consumer confidence and strengthening employment outlooks.
“The upshot of current appraisal levels is that we are anticipating very strong settlement results in May and June, although there is still a shortage of listings, which indicates that some owners are wary that a winter sale will not deliver an optimum price.
“Winter is often overlooked as a good time to sell in many markets around Australia, and despite our strong appraisal numbers, you could be competing with 15-20% fewer homes for sale than in traditionally high volume periods such as early autumn or spring,” says Raine.
“It’s also a fallacy that committed buyers are put off by winter chills, while outdoor factors will have little impact on smaller homes and apartments, for instance.
“However, vendors would do well to heed the advice of their real estate agent when settling on the pricing of their homes to ensure a timely sale this winter.”
New South Wales saw the biggest jump in appraisals between April and February, with appraisals up almost 26%. Victoria appraisals were up 22% for the same period, while Queensland appraisals rose by 15%. Raine &amp; Horne also cited a specialist marketing campaign conducted by the company as a factor in the lift in appraisal and listing activity.
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jrichardson-uRX5hFdKfN

Strong selling conditions for winter: Raine & Horne

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Taking a close look at the Australian Taxation Office’s recently release statistics, Aviate Group managing director Neil Smoli has said that investors need to fundamentally shift their mindset.
Pointing to the 1,895,775 property investors, he noted that 73% have one investment property, 18% have two, 5% have three, 2% have four, 1% have five and 1% have six or more.
“This breakdown is especially significant when you consider that just 1% of the population retires financially free. This means their investments are sufficient to provide the income they require for their retirement without the need to sell assets or rely on family or government assistance,” Smoli said.
With investors increasingly buying into the market, with an extra 84,601 in 2011/2012, he forecasts that in 2012/2013 the numbers should break the two million mark.
“The correlation between the number of Australians who retire financially free and those with a portfolio of five or more properties is more than coincidence. The lesson from these statistics is clear: those in a position to do so should not postpone a decision to invest in their own future,” he said.
He said that a common situation is that many investors who purchased in 2010 are now preparing to sell.
“While most would have purchased their investment property with an eye on the long term future, the fact so many are preparing to sell indicates that the proper due diligence was not taken into account at the time of purchase, relative to the investor’s individual circumstances,” he explained. This may be due to what he considers to be investors buying the wrong property.
The property may have become too hard to hold, however exit and entry costs in real estate are substantial.
“Where an investment property becomes too difficult for the investor to hold in the short term, so much so that they decide it’s easier to sell up and move on, this is symptomatic of the wrong criteria being applied to its acquisition,” he said.
“Some investors in choosing certain properties actually do the hard work – the heavy lifting so to speak – only for subsequent investors to swoop along and reap the benefits. It’s a scenario that’s very common and it occurs when investors purchase a property that causes them a financial struggle.”
He concedes it is often the case that properties become arduous to hold when the rent achievable does not yield an adequate return, leaving the investor paying out hefty funds to cover holding costs. He suggests looking at ways to boost the yield before selling or to get the property tenanted, rather than having a mentality that suggests selling straight away.
Turn the page for Property Observer’s rental yield boosting tips. 
<hr class="system-pagebreak">
For the <a href="/expert-insights/investing/how-to-boost-your-rental-yield">full article on boosting your rental yield, including tips on minimising expenses and understanding your yield, read here</a>.
Five tips for boosting your rental return.
However, there are reasons why you can increase the rent beyond natural increases in the market. For instance, you could consider one of the following:
<ul>
<li>Improvements A renovation or partial renovation, addition of an air conditioning unit or other outlay can be worthwhile to a tenant. They may be willing to pay more for this change. It’s worth getting your property manager to speak to your tenant, as well as doing a quick search as to the difference between your property and that asking a higher rental price. Are there any areas that you can easily improve? Consider adding bedrooms and bathrooms where possible for a potential uplift in rental return. 
</li>
<li>Adding another dwelling For investors in certain areas, this will be more possible. Those with houses, particularly in outer suburban areas, could consider adding a separate dwelling – such as a granny flat – that can then be rented out separately. Of course, this comes with its own combination of difficulties – such as a reduction of rent on the main house and, potentially, a higher vacancy rate. There can also be a hefty outlay to get a decent build. Here are some <a href="/expert-insights/building/the-four-pros-and-four-cons-of-building-a-granny-flat">pros and cons of this strategy</a>.Some swear by this strategy, while others remain sceptical. 
</li>
<li>Renting the property to multiple tenants Another option is to consider renting the home to a number of properties, perhaps on a room-by-room basis. While this, again, can see higher turnover and higher levels of wear-and-tear, and arguably a lower-quality tenant, you may see it give you the rental yield uplift you desire. 
</li>
<li>Consider turning the property into a holiday rental This is not going to be effective for all property owners, however those with a property in an appropriate holiday area with strong demand may find that the high returns available over the holiday period can push their yield up overall. 
</li>
<li>Furnishing the property This is, again, not a strategy that suits every rental. However, in areas where there is demand for furnished properties, it may suit to deck-out the property yourself. Specific tenants, particularly in shorter-stay locations, are willing to pay a premium for the property to be ready for an immediate move in.</li>
</ul>
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jduke-EHk3XBmHkn

Investors need to shift their mindset: Aviate Group

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Whilst there has been so much commentary last week on the federal budget, I thought we could talk about a different type of budget - one that can be just as important, particularly if you are a property developer.
Property developing can throw many different challenges at you and one thing I have learnt in this industry is there is always a solution to a problem. The trick is to understand what possible problems may arise and preparing yourself for them.  Unfortunately things don’t always go to plan and as a project manager it is up to us to make sure the development gets through as efficiently as possible.
One of the biggest problem areas is not allowing enough for building works. 
When pricing a development and running feasibilities, it is important to understand that your building estimate is an organic creature. By this I mean the building estimate you start with will nearly always be different to the one you end with.  It will evolve throughout the process as you obtain more and more details.  Once you have all the fine details, the building estimate can be finalised to the fixed price builder’s tender.  
If architecturally designing our villas, we generally follow this process:
<ol>
<li>Concept plan – this will show the number and size of villas on the land, but not much detail</li>
<li>Development application (DA) plans – enough information is included on the plans to satisfy council</li>
<li>Construction certificate (CC) plans –more detail, including engineer drainage and slab design</li>
</ol>
The starting point for our build estimate will be based on similar projects that we have recently completed and an allowance for the different site.
This progresses to an estimate based on the concept plan.  Still a ‘loose’ estimate as there is usually not enough detail on the concept plan for the builder to have all information he needs.  The build estimate we have at this stage will tell us whether we are tracking within budget.  If not, we can make the necessary changes required, perhaps reducing the size of the villas working with both our builder and architect to design the right dwellings for our project to be successful.
Once the concept plan is approved, the architect will proceed to full DA plans.  It is here that much more detail is added and we will have our builder price the DA plans and review the supporting documentation.  Again, this does not give us a final fixed build cost but we will be getting closer to the expected outcome.  Once approved by our client, the DA plans are finalised and the DA is prepared and lodged with council.
During the DA process, council may request some changes to the plans, so it is important to understand we are still ‘evolving’ at this stage. We also need to review the conditions of the DA consent before we have more detail to finalise the build costs.
Once council have approved the DA, we will start to prepare the CC plans.  Engineers will be briefed and a drainage and engineered slab design or footings for the foundations will be produced. More detail is added to the CC plans, finalising levels and double checking schedules. 
Before we lodge the CC plans with our private certifier we will have our builder issue a third costing. It is this costing that will give us the final build costs...well almost.  We still need to have the CC approved and ensure there are no further revisions to the plans required.  
After we have the CC stamped plans, our builder will issue their final tender and building contract. This will be a fixed price contract; however, there may still be a few items that will be ‘provisional’. They are usually some site works, removal of fill and retaining walls.  The builder may mark these items as provisional as they won’t know until works proceed exactly what the cost is. For instance, if rock is hit during the site cut, this will increase the site costs. If the site cut differs slightly to the plans, this may impact on the height of retaining walls.  So these ‘provisional’ items will be charged at actual cost whether it is lower or higher.
So you can see how the build estimate must evolve through the development process and until your development is completed, you really won’t know the exact cost.  It’s important you allow a contingency amount for any variations that may crop up along the way. 
As a developer, you will embark on a challenging journey from start to finish and the path you choose can be simplified with the help of a project manager to guide you along the way.  Always take the time to have full builder’s estimates done at each stage to avoid any nasty surprises. 
<a href="https://www.propertybloom.com.au/">www.propertybloom.com.au</a> 
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jochivers-wq5Bp59R5a

A different type of budget talk: The development budget

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I was looking over some old files and found a TV interview I did some years ago on a popular property program – Your Money Your Call.
The very first question I was asked by the host Chris Gray was: “Why would someone develop rather than buying and holding?”<a href="https://www.propertybloom.com.au/about/videos"> </a>
{qtube vid:=8wsx8fPOiqQ}
What a great question. It’s really the main reason why many investors take that next step from being an investor to becoming a property developer.
My answer was: "The best thing about developing property is the creation of equity through the development process. So rather than wait for capital growth to happen (over time), you create equity by adding value."  
In a nutshell, this really is what most developers are trying to achieve. Some call it the ‘developer margin’ but I call it ‘creating equity’ - it’s the amount of money created when the costs of developing a property are taken away from the value of the project on completion.
<blockquote>
The best thing about developing property is the creation of equity through the development process.
</blockquote>
I like the term ‘creating equity’ over say ‘manufacturing equity’ because when you are a property developer, you are very much part of a very creative process. 
As a developer, you have a lot that you can control, yet there are also some things you can’t control.  If you make the right decisions around the stuff you are in control of; smart plan design, meeting the needs of your target market, efficiency in the build process by using a trustworthy and experienced builder and some strong interior design choices then you can boost the equity creation process.
At the same time, if you can minimise the risks on the things you are not so much in control of; council processing time, finance approval times and inclement weather then you are giving yourself the best ‘equity creation’ opportunity.
So what would you rather?  Buy, hold, wait for equity; or buy, make and create equity? 
I know what I would choose every time.
<a href="https://www.propertybloom.com.au/" target="_blank">www.propertybloom.com.au</a>
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Develop or buy and hold? Why it all comes down to creating equity

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GUEST OBSERVATION
Although property investment remains very active well into 2014, this does not mean each and every investor is guaranteed success. Once you have found or developed the perfect property, the next step may be to attract and rent it out to quality, reliable tenants as opposed to selling it straight away for a profit.
Needless to say, a property that is well presented will attract tenants who will care for it as if it were their own.  And this is where home staging goes a long way to ensure appropriate presentation of your property.
<blockquote>
Finding the right tenant is not difficult if you determine your target market, create a good impression and screen candidates.
</blockquote>
Furnishing and styling a house, or rather staging it, was once only used to sell off new developments. Today, an increasing number of savvy property investors are using it to showcase a property’s strong points to good quality prospective tenants.
Attracting the right type of tenants is essential to maximising your property investment.  In addition, if you intend to sell an investment property, having top quality tenants ensures that property is even more appealing to buy for other investors.
Finding the right tenant is not difficult if you determine your target market, create a good first impression and screen prospective candidates appropriately.
Step one – Determine the right type of tenant for your property
It is crucial you understand the location of your property, who is living in the area and who wants to live there.
In order to do this, ask your local expert agent.  Look at the schools, transport and other services in the area to try and determine your potential tenant profile.
Are they likely to be young professional couples or families with kids?
Knowing who the renter is and making your place the one that ticks all or at least most of the boxes will mean you will find the right tenant faster.
Step two – Stage your property to make a great impression
The type of tenants who take care of their rental will most likely look for a property that's in great condition to begin with. So take the time to ensure your property is in top shape before listing it for lease.
In addition you want the right people to connect emotionally with your property.  
So, create a space where a prospective tenant can see them selves and they can imagine and aspire to the lifestyle that the property affords.
Staging a property that is for rent is even more important in the sense that people need to know what they can do to the place that is not permanent. 
<blockquote>
You want the right people to connect emotionally with your property. 
</blockquote>
After all their instinct would be to make the space shine and homely, and a perfect spot for them to spend their time. When renting this needs to be done without making huge or permanent changes.
Most of all in pre-sale or rental market property styling, there is the trend to focus on styling for a lifestyle. So if a property has a great outdoor space, don’t leave anything up to the imagination. Style the space to show people how they can use it and enjoy it!
Step three – Finding the right tenant for your property
If you are not confident in finding tenants on your own, sign up an experienced, reputable property manager. Your time is money so the expertise a property manager brings can be very valuable.  
So do your research and find out:
<ol>
<li>Who manages most of the properties in the area</li>
<li>How often they inspect your property</li>
<li>Their mode and frequency of communication and feedback with you</li>
</ol>
Finally, whilst a high quality presentation is no guarantee of a high quality tenant, there is no doubt it gives you the best possible chance of achieving a higher rent, quicker and a higher quality tenant.
Staging your house will attract the tenant you want to be in your house. Your success as an investor depends on the type of tenant you have living on your property.
Naomi Findlay is the award winning founder of the <a href="https://www.instituteofhomestaging.com.au/" target="_blank">International Institute of Home Staging</a> (IIHS) and SILK Home Staging &amp; Styling. She is also the author of a bestselling book, Ignite Your Property Mojo.
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jake-cSmGT7VXVf

Staging your investment property for a great rental return on investment

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A good development strategy for a first time developer and investor wanting to boost their property portfolio is a dual occupancy project; buying land where you can build two dwellings and subdividing. 
The dwelling/villas may be attached or freestanding, either way you are basically halving the land cost for each. And that is where the value lies.
Where Property Bloom develops, there is usually opportunity to create around $100,000 in equity through a dual occupancy development within about 12 months. This does not take into consideration any capital growth that also may occur during the development period. That is a bonus if it occurs.  If you are developing when the market is moving up, then you have timed your development well. Even if the market is flat, you can manufacture some equity. The equity created is purely because you are the developer and you are adding value to the land not with one dwelling but with two.
Here’s an example of a dual occupancy project we recently completed:
Land cost: $200,000
Stamp duty: Nil
($5,000 <a href="https://www.osr.nsw.gov.au/lib/doc/factsheets/ofs_nhg1.pdf" target="_blank">NSW New Home Grant</a> applied so the government contributes $5,000 and this off sets the stamp duty cost)
Legal fees: $1,500
Build cost, including subdivision costs, for two freestanding, three bedroom, two bathroom villas:  $430,000
Total cost:  $631,500
Actual end valuations:  $750,000 or $375,000 per villa
Equity created:  $118,500
Gross yield: 6.3% based on renting each villa at $380 per week
If you are borrowing at around 4.5% then the project may be cash flow positive for you. This is when the rent and depreciation benefits combined cover the costs of interest, insurance, council, water rates and management fees.
Expected depreciation: $20,000 in year one (using the diminishing method)
Want to know how to do it?  Well you can either use an experienced project manager to guide you through or have a go yourself, it will depend on the resources or skills you have available, time, experience and some grit. 
The steps involved in a dual occupancy development strategy are:
<ol>
<li>Finance preapproval. It’s important before you start looking at development sites or any property, that you have a preapproval from a lender in place. 
</li>
<li>Understand the council requirements for dual occupancies in this area. Read council’s local environment plan (LEP) and development control plan (DCP). This will let you know the size of land you’ll need for your dual occ and what is permissible. 
</li>
<li>Focus your attention on the area you want to develop in, making sure the location is correctly zoned for dual occupancies. But even if it is zoned for this type of development, there may be covenants on the land preventing it.  It’s important to narrow down to one or two suburbs based on your research.  This is a really important stage and you need to understand the area well.   </li>
<li>Search for land that meets the dual occupancy criteria. Size – look at the frontage and know what the minimum width is for your dual occ. If it’s a duplex site, you may need a minimum of 18-20 metres frontage – it will depend on the duplex design you want to use. Look at the depth and size to ensure the land is large enough to meet the DCP requirements, look at the aspect and if there is enough area to meet the minimum outdoor private space requirement.  Make sure there are services to the site; electricity, sewerage, gas. Then ensure the land is relatively flat with a slight slope to the street unless there is a drainage easement at the back.  
</li>
<li>Check the planning certificate to see if it is in a bushfire or flood zone.  You can still develop in these areas but it will add to your build costs.  
</li>
<li>Have your builder look at the site. This is very important as the builder will look at the land from a different perspective. 
</li>
<li>Run your feasibility to ensure the project will be viable. You will need to find recent comparable sales references then you can base your end value estimate on this.  Talk to agents about the current rental market and what rent could be expected then work out the projected yield on completion.  Most importantly, you need to have a good understanding of the build costs. The build costs will evolve over the design and planning process. Your builder can give you an estimate once a concept plan is available, but as the full development application (DA) plans and documentation is available, the builder will then need to run a full tender. You can cross check this against your original estimate. If it’s in line, lodge the DA if it’s not, go back to the design and look at areas where you can reduce costs. Once the plans are approved, the builder may run a second tender if council asked for any changes. If not, then a last tender will be generated once the engineer’s plans for the construction certificate (CC) are available. 
</li>
<li>Secure the dual occ site and try for a long settlement period with permission to lodge a DA from the vendor. You can get all the design work and perhaps even have the DA and CC approved before you settle on the land, this will reduce your holding costs. Make sure you include the subdivision on your DA. 
</li>
<li>Once you have the DA and CC approvals, you can then go back to your lender to obtain your unconditional construction loan. As soon as this is in place, the builder can start. 
</li>
<li>The build phase for a dual occupancy should be around three to four month or so, depending on weather. You need to be on site each week to check the builder’s progress and put out any ‘fires’ that may arise as you are under construction. 
</li>
<li>Once the building works are completed, an occupation certificate will be issued. You can now have your villas tenanted. Don’t forget to order a depreciation schedule; this is simple, just email the plans and builders tender and any other cost details to your quantity surveyor.  
</li>
<li>You can now apply for the subdivision certificate and once council issues this, you can register the subdivision (after your lender has signed off on it).  There is no need to register immediately if you are planning to hold and not planning to refinance as you may find costs such as rates may be a little less if the villas are kept on one title.</li>
</ol>
I’ve summarised the process very quickly, it’s not that straight forward and you really do need the time to work on this development strategy closely as mistakes can be costly when developing property. But you can have your cake and eat it too by using an experienced property development project manager. You will learn so much from the process, can still keep your day job and know that you are in the hands of a professional. Then you may find you will be ready to do the next project on your own.
<a href="https://www.propertybloom.com.au/" target="_blank">www.propertybloom.com.au</a>
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