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.

Joel Robinson

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

&nbsp;

Developer GURNER™ Group has revealed $1.65 billion in residential sales nationally across the 12 months to December 2025, driven largely by the continued momentum of its Docklands wellness-focused precinct, Elysium Fields.

The sales result was generated across seven projects in Victoria and New South Wales, headlined by Elysium Fields, GURNER™’s $2.75 billion mixed-use precinct planned for Harbour Esplanade in Docklands.

The project has recorded more than $500 million in sales across the first three towers, equating to around 580 apartments sold.

The first tower, Helios, has now sold out of its 240 private residences, with GURNER™ preparing to release a premium penthouse collection comprising 15 three-bedroom penthouses in coming weeks.

[smartcode_project:default project_id=144441 project_image_fid=370975]

Elysium Fields is being developed on the long-held 20,000 sqm Docklands site at 208-226 Harbour Esplanade, which had remained undeveloped for more than two decades prior to GURNER™ taking over the project around four years ago.

Construction has now commenced across four towers ranging between 18 and 30 storeys, with Hamilton Marino and Maxcon appointed as builders.

Once complete, the precinct is expected to comprise around 1,100 residences, alongside retail, hospitality and public realm uses integrated throughout the site.

[smartcode_project:default project_id=144441 project_image_fid=370981]

Designed by Fraser &amp; Partners in collaboration with GURNER™ Design House, the project has been positioned around the developer’s broader focus on wellness-led residential living.

“We don’t sell apartments. We create a true luxury lifestyle that simply doesn’t exist elsewhere in the market today,” Founder and Executive Chairman Tim Gurner said.

“To deliver that requires an extraordinary level of detail, coordination and discipline across multiple verticals, from design and hospitality through to wellness and service.”

“We’ve always believed that living extends far beyond the physical residence. It’s about how you feel the moment you arrive, how you live day-to-day, and the ecosystem that supports that.” 
[smartcode_project:default project_id=144441 project_image_fid=370977]

The project’s design places a heavy focus on landscaping, wellness amenities and biophilic design principles.

Plans include around 3,700 sqm of landscaped gardens and open space throughout the precinct, alongside a retail and dining offering spanning approximately 5,000 sqm.

The broader public realm strategy centres around what GURNER™ describes as the “Path of Life”, an urban forest and landscaped pedestrian environment intended to connect the various buildings and wellness spaces across the precinct.

The apartments themselves will incorporate a range of wellness-focused inclusions, including purified air and water systems, circadian lighting, antimicrobial surfaces, and optional in-home wellness upgrades.

[smartcode_project:default project_id=144441 project_image_fid=370980]

Gurner said the company’s experience through its Saint Haven wellness clubs had directly informed the residential offering now being incorporated into Elysium Fields.

“We’re seeing a clear global shift toward longevity, performance and proactive health,” Gurner said.

“Our role is to deliver that in a way that feels seamless, highly private and beautifully resolved within the environments we create.”

A large component of the wellness offering is planned through the resident amenity and health facilities proposed within the precinct.

That includes plans for bathing and recovery facilities spread throughout the towers, incorporating mineral pools, saunas, steam rooms, flotation therapy, red light therapy and wellness lounges.

The developer is also seeking approvals for what it describes as a “reverse ageing medical clinic” within the precinct.

[smartcode_project:default project_id=144441 project_image_fid=370978]

According to project information released by the group, the proposed facility would include cryotherapy, IV infusion therapy, infrared and dry saunas, PEMF beds, MRIs, DEXA scans, brain scans and blood analysis services.

Within the first tower, Helios, residents will also have access to a dedicated amenity offering known as the Sky Private Club.

The upper 15 levels of the building will include private lounges, dining spaces, rooftop amenities and optional private wellness studios integrated within residences.

The Helios tower itself comprises 260 apartments ranging between 60 sqm and 300 sqm, including a collection of penthouses.

That includes a planned two-storey penthouse spanning around 600 sqm with uninterrupted bay views.

The Elysium Fields precinct is being delivered in partnership with Digital Harbour Holdings, a consortium that includes the Liberman family, which controls the development rights across the Docklands site.

[smartcode_project:default project_id=144441 project_image_fid=370979]

The sales result comes as GURNER™ continues expanding its national development pipeline beyond Victoria.

“We have a strong pipeline across Australia and are now focused on scaling into key markets including New South Wales and Queensland, while continuing to build on our Melbourne base,” Gurner said.

“We currently have more than $3 billion in the market, growing to over $5 billion by October, and expect to materially outperform last year in the 2026 calendar year.”

The result also reflects the continued strength of the upper-end apartment market in Melbourne, particularly for owner-occupier-focused product with large-scale amenity and lifestyle offerings.

[smartcode_project_cta:default project_id=144441]

Record result anchored by the Group’s “utopian” Elysium Fields precinct – defying market headwinds in Docklands.

Elysium Fields drive Gurner to $1.65 billion in apartment sales over 2025

National Australia Bank (NAB) will fund <a href="https://www.apartments.com.au/new-apartments/palmera-residences-gold-coast-18-garfield-terrace-surfers-paradise-qld-4217">Palmera</a>, a $1 billion, 52-level luxury residential tower being developed by Central Equity in one of the Gold Coast’s most tightly held coastal locations at Northcliffe.

The project, launched recently by <a href="https://www.apartments.com.au/developers/central-equity">Central Equity</a>, one of Victoria’s largest private residential developers, comes at a time when construction funding for large residential developments has become increasingly competitive as lenders tighten exposure to the sector.

Multiplex has been appointed the builder, and construction is now underway.

[smartcode_project:default project_id=108274 project_image_fid=365784]

Since its first project, Central Equity has delivered more than 85 residential developments with a combined end value exceeding $8 billion.

Palmera reflects Central Equity’s growing focus on the Gold Coast luxury apartment market and continues a relationship between Central Equity and NAB that dates back to the late 1980s, when the bank funded one of Melbourne’s earliest inner-city residential towers at a time when high-rise apartment living in the CBD was largely unproven.

“NAB’s funding of Central Equity’s $36 million CBD development in the late 1980’s to the financing of the billion-dollar tower today highlights the long-term relationship between the two organisations in delivering major residential projects” said Central Equity Founder and Chairman Eddie Kutner.

He said NAB’s early support was instrumental in helping establish the company’s development model.

“When we commenced our first residential tower in the late 1980s the concept of funding off-the-plan apartments was still largely untested in Australia,” Kutner said.

“NAB recognised the opportunity early and supported the project when others were uncertain. That relationship has now continued for more than 37 years across many developments.”

[smartcode_project:default project_id=108274 project_image_fid=365771]

Central Equity was established in 1987 when Melbourne’s CBD and Southbank precinct were still dominated by warehouses and commercial buildings. Fewer than 100 residents lived in Southbank at the time, and large-scale residential development in the inner city was not widely considered.

Recognising changing demographics and lifestyle preferences, the company began developing high-rise residential projects designed to bring permanent residents into the city centre.

Central Equity has provided accommodation for approximately 40,000 residents across Melbourne’s CBD and Southbank, while also incorporating supporting infrastructure including essential lifestyle facilities like retail spaces, childcare facilities and neighbourhood activity centres.

Central Equity has spent many years assembling the Palmera development site on the corner of Garfield Terrace and Frederick Street in Northcliffe, creating a supersite of around 3,300 sqm.

The developer said the Palmera apartment tower reflects its long-term view of the Gold Coast as a growing and increasingly diversified economy.

[smartcode_project:default project_id=108274 project_image_fid=365768]

Supported by infrastructure including the light rail network, major road upgrades expanded education, hospital and medical facilities and continued expansion at the Gold Coast Airport with more international and domestic flights.

Positioned in the tightly held Northcliffe precinct, the 52-level tower will deliver 347 apartments, targeting buyers seeking a high-end coastal lifestyle, from downsizers to interstate investors.

Designed by Marchese Partners with interiors by DBI, Palmera has been conceived as a next-generation residential offering, featuring a collection of oversized apartments, with premium three-bedroom residences offering sweeping northern views stretching from Surfers Paradise through to Burleigh Heads.

[smartcode_project_cta:default project_id=108274]

NAB funds $1 billion Surfers Paradise apartment development, Palmera

Two years after completing one of the newest developments in North Sydney, developer <a href="https://www.apartments.com.au/developers/aqualand-australia">Aqualand</a> is turning its attention to the rapidly evolving St Leonards apartment market.

The developer, which completed AURA by Aqualand on North Sydney's Walker Street, has lodged plans for a 5,918 sqm site at <a href="https://www.apartments.com.au/new-apartments/33-37-herbert-street-st-leonards-nsw-2065">33-37 Herbert Street, St Leonards,</a> seeking approval for a pair of residential towers rising above a shared podium opposite Royal North Shore Hospital.

The proposal forms part of the broader transformation underway across the St Leonards-Crows Nest precinct, where former industrial and commercial sites are increasingly being redeveloped into high-density mixed-use projects tied to major transport infrastructure.

<img alt="Aqualand" data-entity-type="file" data-entity-uuid="2cc428cf-fe70-4cac-9cd5-264ad53af62c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%209.51.56%E2%80%AFAM.png?VersionId=otKSnHtbjAvAddOnovyXQMgcAwE6DMe1" />

According to the planning documents, the site sits “within the St Leonards–Crows Nest Strategic Centre, identified by the NSW Government as a key area for accommodating future jobs and housing across Sydney.”

The proposal has been designed by fjcstudio, formerly FJMT Studio, and is being progressed through the State Significant Development pathway due to its scale and affordable housing provision.

The scheme would comprise 413 apartments, including 46 affordable housing units, alongside retail and commercial uses fronting Herbert Street. The project would also include communal open space, landscaping, a swimming pool, gymnasium, children’s play areas and podium-level resident amenities.

Planning documents show the development would consist of a part-13, part-39 storey tower form positioned above a four-storey podium.

“The development comprises a unified podium that activates the street interface, and two setback towers to accommodate new housing supply while maintaining an appropriate human scale at ground level,” fjcstudio noted in its Design Report.

The northern and southern towers have been shaped to respond to the surrounding skyline while also limiting overshadowing impacts to nearby public open space, particularly Talus Reserve.

The design report said the differing tower heights were intended to “contribute to a varied skyline while responding to the surrounding built form context and solar access considerations.”

<img alt="Aqualand" data-entity-type="file" data-entity-uuid="36da62dc-ff9e-41f2-a7e3-7be38373751c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%209.51.45%E2%80%AFAM_0.png?VersionId=Mo6Rp2r.XRLTzIfg_PEEpw8NepDH8UBs" />

The site sits directly opposite Royal North Shore Hospital and within walking distance of both St Leonards Station and the new Crows Nest Metro station.

While the site itself sits just outside the formal Crows Nest Transport Oriented Development boundary, the planning documents repeatedly reference its alignment with the broader TOD objectives reshaping the Lower North Shore.

“The site is located adjacent to St Leonards Station and in close proximity to Crows Nest Metro which is within the Crows Nest Transit Orientated Development Accelerated Precinct which has been identified by the NSW Government to support housing delivery,” the Design Verification Statement noted.

According to fjcstudio, the project has been designed to respond to the broader transition occurring across St Leonards, where increasing residential density is being concentrated around transport infrastructure and employment hubs.

“The broader precinct is undergoing significant change, with a mix of existing mid-rise buildings and newer high-density developments,” the report stated.

“Recent and approved projects indicate a consistent shift toward taller built form, typically organised as tower-and-podium typologies with more active ground levels.”

The proposal includes close to 6,000 sqm of retail and commercial space across the ground floor and podium levels, designed to create a more activated street edge along Herbert Street.

Aqualand’s plans would also introduce a landscaped podium shared between the two towers, with communal open space in the form of a podium rooftop designed to support resident interaction and improve urban greening outcomes. The scheme would also introduce pocket parks at the northern and southern ends of the site, including a landscaped area at the corner of Herbert and Ella streets designed to improve pedestrian amenity and soften the streetscape.

&nbsp;

The proposal is being progressed through the NSW Government’s Housing Delivery Authority pathway, which was introduced to accelerate housing supply across the state. The application was declared State Significant Development in April 2025 following an expression of interest process.

<img alt="Aqualand" data-entity-type="file" data-entity-uuid="faf6d97d-2671-454f-b85a-fe1c6a7be608" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%209.51.49%E2%80%AFAM.png?VersionId=diVd28OBVr5.YV.7prrOz.uAanwwwm7a" />

St Leonards has been particularly active with new developments in recent weeks. Developer SP Setia’s <a href="https://www.apartments.com.au/news/nsw/first-look-sp-setia-targets-st-leonards-skyline-with-40-storey-tod-tower">plans for a new 42-storey tower</a> recently went on exhibition through the same pathway, while <a href="https://www.apartments.com.au/news/nsw/first-look-stockland-plans-52-storey-538-apartment-st-leonards-tower">Stockland’s 52-storey tower proposal</a> was also recently unveiled.

Aside from the St Leonards project, which is expected to take around nine months to move through the approvals process ahead of a potential 2027 launch, Aqualand is also preparing to launch Boronia, a new apartment project in Roseville comprising around 111 apartments on Larkin Street.

The developer also has approvals in place for the next stage of the Barangaroo precinct, which will feature new residential, retail, hospitality and community uses, alongside a new metro entry across the five-hectare site.

More than 50 new retail destinations are planned for Central Barangaroo, alongside a 270-metre-long boulevard connecting Hickson Park to Nawi Cove. Together with Harbour Park, more than 50 per cent of the precinct will comprise public open space and parkland.

First look: Aqualand joins St Leonards apartment party

Terry Ryder

<html><body>
For the past three years, dwelling construction nationwide has been rising at an unprecedented rate.
New home construction was up 11% in FY2013, up a further 12% in FY2014 and is on track for another 8% rise in the current financial year.
The Housing Industry Association expects almost 200,000 new homes to be built this financial year or be under construction by June. This is a national record.
Across the nation, residential building approvals have risen 12% in the past 12 months, including a 19% rise in Victoria, a 14% rise in Western Australia and a 34% rise in Tasmania.
We’re at the point where we’re building too many new homes in some locations – and in particular far too many inner city apartments.
But, rather incredibly, the developer lobby is still crying shortage.
Last week the Daily Telegraph, never one to let the facts get in the way of a cheap headline, claimed Sydney is facing “a housing crisis with a staggering 190,000 shortfall in homes needed to house the growing population”.
The newspaper claimed it had obtained “an exclusive report” which revealed the breathtaking news that “Sydney councils have failed to approve new dwellings fast enough to meet demand, and were now partly responsible for the sharp rise in home prices in Sydney”.
Where did this priceless document come from? Yes, you guessed it, it was another press release from the developer lobby, represented in this case by the Property Council of Australia, singing its usual mantra.
In case you’ve forgotten how the manta goes, here it is: We have a chronic housing shortage crisis, despite all the contradictory evidence. And there’s only one way to fix it: give us our wish list and we can make the crisis go away. It’s purely coincidence that all the measures we’re recommending are highly advantageous to developers and builders. No, really, we’re serious.
Here’s the Sydney newspaper’s take on these stunning “research” findings: “More alarming was the finding that over the next decade, families would struggle to find anywhere to live, with an estimated shortfall of almost 20,000 homes a year being approved at current rates.”
So the “staggering” shortfall isn’t a fact, but a forecast concocted by people with a vested interest in having the claims believed.
“Sydney councils need to turbocharge housing supply because right now home buyers and our economy are paying the price,” NSW Property Council executive director Glenn Byres said, if you can believe the Daily Telegraph.
But the Newcastle Herald stretched the truth even further with the ludicrous claim that the Hunter region had a serious shortage of housing.
This region’s property market has been in rapid reverse for the past two years for the opposite reason: an alarming oversupply.
So how did the Newcastle Herald come to this stunning conclusion in the face of all the evidence? It was, once again, the Property Council, which has obviously been pumping out press releases all over the country as part of its relentless, remorseless and baseless campaign to pressure governments into concessions.
The newspaper wrote: “The supply of new housing in the Lower Hunter has fallen short of government targets by more than 23,000 homes in the past decade, with the deficit set to worsen to nearly 30,000 by 2024, a report done for the Property Council says.”
It would be hilarious were it not so serious. The reality is that developers, seeking to exploit the coal mining boom, flooded the Hunter region with far too many new homes – and, with that unerring ability of developers to get their timing wrong, this coincided with a collapse of resources-related demand.
In Singleton, residential vacancies rose from around 1% in early 2012 to about 8% in mid-2013, and remain high at close to 6%. Prices have dropped 15% and it takes six months on average to sell a house in Singleton.
In Muswellbrook, vacancies went as high as 15% and are currently close to 10%. It takes six months on average to sell a house, but only if you’re willing to knock 12% or so off your asking price. Prices are down 7% in the past year.
Cessnock got off relatively lightly, with vacancies going only as high as 6%, but in Greta they were close to 10% and remain above 5%. According to Domain, the average time on market to sell a Greta house is about eight months.
And in Branxton, vacancies hit 15% in 2013, were still 12% in mid-2014 and are currently 6%.
But, hey, don’t be fooled. There really is a shortage. The Property Council wouldn’t say it if it wasn’t true.
Indeed, it made the same sinister warning as the Sydney-based crowd. “Home buyers will pay the price if changes aren’t made to ensure the provision of more housing, the industry group has warned,” intoned the faithful Newcastle Herald, not one to rock the local boat by asking a tough question or two.
One possible question might have been: “Are you out of your freaking minds?”
The Newcastle Herald report, similar to the Daily Telegraph one, talked about the need to “turbo-charge” housing supply in the Hunter region. So clearly the Property Council has spewed forth the same basic press release everywhere, regardless of the local situation.
Hence the farcical outcome in Newcastle, with the local rag claiming that a grossly oversupplied market has a shortage.
TERRY RYDER is the founder of <a href="https://hotspotting.com.au/" target="_blank">hotspotting.com.au</a>. You can <a href="https://mailto:ryder@hotspotting.com.au" target="_blank">email him</a> or follow him on <a href="https://www.twitter.com/hotspotting" target="_blank">Twitter</a>.
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terryryder-YECXbqmri2

The development lobby is still crying shortage: Terry Ryder

<html><body>
The Prime Minister’s clampdown on foreign investors in Australian real estate has been revealed as little more than a revenue raising exercise.
After all the posturing, this is what it comes down to: a cash grab. Politicians doing to real estate what they always do to real estate: using it as a cash cow.
Overseas buyers will be charged hefty fees for the privilege of buying Australian real estate and Australian developers will be charged the same hefty fees for the right to sell to them.
Otherwise nothing will change in the national property landscape. Not a single sale price will be reduced or not one first home buyer will be better off.
As well as a cash grab, the Tony Abbott move on foreign investment is also a push for popularity by appearing to be doing something for the ordinary bloke. But the thinking is so fuzzy and the policy delivery so confused that it won’t achieve even that shallow objective.
I listened to Abbott announcing and justifying the proposed policy and it was clear he had not sorted out his thinking. The arguments simply didn’t stack up.
He was still trying to infer that somehow this will help battlers achieve the 'Great Australian Dream' but couldn’t explain how this policy will achieve that.
He maintained that foreign investment was important to Australia and that foreign buying increased supply and therefore made dwellings more affordable for the ordinary bloke, but couldn’t explain how these new punitive measures would help to achieve that, when they appear set up to discourage and curtail foreign investment.
It’s all rather bizarre.
There are measures to clampdown on developers who focus their marketing overseas without trying to sell their high-rise apartments locally. But foreign investors are the sole reason most of these highrise buildings are being planned. This is particularly true in over-supplied markets like inner city Melbourne and downtown Brisbane.
They’re not designed for local consumption. Without most, if not all, of the units being sold offshore, these projects will not be built.
That will reduce supply, which theoretically places upward pressure on prices. And it will reduce construction activity, which is deemed the economic savior of the nation at a time when resources investment is declining.
The bottom line is that restraining foreign investment won’t make Australian dwellings more affordable. It will do nothing to change the situation for first time buyers.
Foreign investors are a very small component of the Australian buying market. Their activity is primarily focused on Top End properties in the prestige suburbs of Sydney and Melbourne, and on highrise apartments in the inner city areas of our major cities.
They are not competing with local first time buyers. Restricting foreign buyers won’t change the price on a single house anywhere in Australia. It won’t stop people of Asian appearance (dubbed foreign buyers by disgruntled under-bidders) from winning bidding wars at Sydney and Melbourne auctions of prestige property.
It’s a Yes Minister scenario, designed by Sir Humphrey Appleby and delivered by a befuddled Jim Hacker, who somehow got the pages of the script mixed up - again.
TERRY RYDER is the founder of <a href="https://hotspotting.com.au/" target="_blank">hotspotting.com.au</a>. You can <a href="https://mailto:ryder@hotspotting.com.au" target="_blank">email him</a> or follow him on <a href="https://www.twitter.com/hotspotting" target="_blank">Twitter</a>.
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Abbott's foreign investor cash grab built on bizarre logic: Terry Ryder

<html><body>
Most investors never make it past one investment property. The research indicates most Australians who buy an investment property no longer own that property - or any investment properties - within five years.
Sadly, many investors have bad experiences. They start from a base of little knowledge, compound it by failing to conduct (or pay for) quality research and ultimately make poor decisions.
I recently hosted a webinar which featured David McMillan, director of Performance Property Advisory, who said many investors fall victim to a series of myths and pitfalls.
They include:
<ul>
<li>Believing that property doubles every seven to 10 years on average. 
</li>
<li>Listening to mainstream media. 
</li>
<li>Failing to carry out proper research or being unwilling to pay for research. 
</li>
<li>Preferring, instead, to access free advice, which ultimately can be costly. 
</li>
<li>Failing to realise that the goal is not to buy property, but to build wealth. 
</li>
<li>Buying negatively-geared property in areas where values are not rising. 
</li>
<li>The “location location location” mantra, “an excuse for people to be complacent”. 
</li>
<li>Wanting to own local property so they can drive past to check on it. 
</li>
<li>Believing extreme bull or bear predictions.</li>
</ul>
“The property market does not double every seven to 10 years on average,” McMillan said. “This is one of the biggest myths in real estate. The agents have been very good at persuading the market that this is what happens. But doubling cycles are between 10 and 15 years.”
I agree with him. A 10% annual growth rate average was required for property to double every seven years, but the national capital city average for the past decade is 5.4% per year.
McMillan also shares my views about the real estate content of metropolitan newspapers. “A lot of what appears in mainstream media is what I call ‘noise’, which can distract investors and cause them to make mistakes by making decisions based on misinformation,” he said.
McMillan said people should never buy property unless it had a good chance of achieving at least 25% capital growth in the first three to four years of ownership.
“The only way to grow your portfolio is by owning property which gives you short-term growth,” he said. “As one example, investors should avoid Melbourne’s inner-city apartment market. The chances of any growth in the next three to  years are minimal. If an investor is spending $500,000 in this market, in three years it will still be worth $500,000 or possibly $480,000 or less.”
McMillan said Performance Property Advisory considered Sydney, Melbourne, Brisbane, Perth and Adelaide to be the primary markets for investors, while Newcastle, Canberra, Sunshine Coast, Wollongong, Hobart, Geelong, Townsville, Cairns, Ballarat and Bendigo were good secondary markets.
He said land content was a significant driver of capital growth, while dwellings on the land were drivers of cash flow. “Buy property that has at least 65% land value,” he said.
McMillan advised investors to avoid small towns, mining towns, markets with poor capital growth records, and areas with an abundance of land able to be developed. “I would avoid mining towns altogether, especially if you are a first time investor,” he said. “The returns may be there in some years, but mining towns will always be boom and bust markets.”
Factors to avoid with individual properties include locations on main roads, being next to commercial uses including offices and service stations, and being close to train lines. “Buy close to train stations, certainly, but not abutting train lines,” he said.
McMillan urged buyers to avoid properties with noise issues, safety concerns and privacy issues. He also opposed “generic property” which lacked a scarcity element, such as modern highrise apartments.
He said investors should shun apartment buildings with more than 20 units and lots of common amenities such as pools, gyms and lifts - which increase liability and strata fees.
He said new developments often had low ceiling heights, small bedrooms, poor natural light, limited car parking and poor storage. “Owner occupiers will never want to live in them long-term. They will always be traded investor to investor.”
He preferred smaller boutique unit blocks, preferably with only half a dozen units, with individual character and good features. “Unit blocks built before the 1980s tend to have the best features,” he said. “In addition, you should aim for body corporate fees to be about 0.5% of property value.”
Generally, he recommended investors buy established property rather than new. “Established property is better value from a land content viewpoint and from a scarcity viewpoint. Units have land content but the land content with new high-rise units is very low, whereas with the older-style boutique buildings it’s high.”
This is reinforced by individual research showing that units in boutique blocks show much higher capital growth than units in generic highrise buildings.
TERRY RYDER is the founder of <a href="https://hotspotting.com.au/" target="_blank">hotspotting.com.au</a>. You can <a href="https://mailto:ryder@hotspotting.com.au" target="_blank">email him</a> or follow him on <a href="https://www.twitter.com/hotspotting" target="_blank">Twitter</a>.
If you missed our free webinar with Terry Ryder, 'The Best and Worst for 2015: Top 5 Hotspots and 5 Places to Avoid', you can <a href="https://propertyobserver.us2.list-manage.com/track/click?u=24bd0766a834290948593f5aa&amp;id=2e37cb3570&amp;e=035e81ff9a" target="_blank">watch the video or download the slides here</a>. 
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The greatest property investment myths and pitfalls: Terry Ryder

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Tony Abbott is on a yellow card and is one major mistake away from being red-carded.
Another display of the bad judgment for which he has become infamous and he’ll be kicked out of the game by his own team.
Un-phased, the Prime Minister is already working on his next own goal.
He’s made it known that he’s going to clamp down on foreign investors. Someone has managed to convince him that somehow this will bring down the price of houses and first home buyers across Australia will rejoice.
He’s getting seriously bad advice from somewhere. He could eliminate every foreign investor from the Australian residential landscape and it wouldn’t reduce a single home price.
Of all the buying sectors in residential property – first time buyers, next time buyers, local investors and foreign investors – overseas buyers are the smallest and least influential. The recent NAB survey confirmed this.
In the established homes market, where first home buyers are most active, overseas buyers are a negligible component.
Foreign investors are active primarily in the new homes market. They buy highrise apartments off the plan in the major inner city markets. This is not a market for first home buyers.
These two sectors – first home buyers and foreign investors – are not competing in the same space.
Abbott’s stance is an outcome of the federal parliamentary inquiry into the “affordability crisis”. This has been a farce from the beginning because it was based on the notion that first home buyer numbers had dropped alarmingly – which is now revealed as a miscount by the Australian Bureau of Statistics.
So the initial premise arose from a mistake and Abbott proposes to compound the error with another, by blaming an innocent party for a non-existent problem.
The inquiry received evidence that foreign investors assist first home buyers because they’re the motivation for the construction of multiple highrise apartment buildings. The increase in supply is deemed likely to bring down prices, thereby assisting first time buyers.
I would suggest that’s a flimsy argument, but that’s what the pointless inquiry was told.
The strangest thing in all this is that the Prime Minister imagines Australians will thank him if he succeeds in reducing the value of homes across the nation. Given that seven out of 10 households own their homes, he’s on a confirmed loser with this one.
But whatever he does with foreign investors won’t affect the pricing levels created by market forces.
Once again, politicians are tinkering at the edges of the affordability issue. A leader serious about making new homes more affordable for first time buyers would address the single biggest issue – the taxation component in the cost of a new home.
New homes are a lot more expensive that established ones (which is a primary reason why first timers target established homes). The research indicates that as much as 40% of the price of a new house and land package is government fees and charges.
Dealing with that is simply not palatable for your average politician. Abbott is doing what politicians always do with the affordability issue – they talk about it a lot, but in essence they do nothing meaningful. A solution is within their power but they refuse to go there.
So the chosen course of action is once again taken from the scripts of Yes Minister. Find an unpopular minority and vilify them in speeches and press conferences, but at the end of the day do nothing that changes the status quo.
It won’t take long for people to realise that waving a stick at foreign investors hasn’t changed anything for first home buyers.
Poor Tony. When he needs to be riding a winner, he’s flogging a dead horse.
Or is it a case of dead man walking.
TERRY RYDER is the founder of <a href="https://hotspotting.com.au/" target="_blank">hotspotting.com.au</a>. You can <a href="https://mailto:ryder@hotspotting.com.au" target="_blank">email him</a> or follow him on <a href="https://www.twitter.com/hotspotting" target="_blank">Twitter</a>.
If you missed our free webinar with Terry Ryder, 'The Best and Worst for 2015: Top 5 Hotspots and 5 Places to Avoid', you can <a href="https://propertyobserver.us2.list-manage.com/track/click?u=24bd0766a834290948593f5aa&amp;id=2e37cb3570&amp;e=035e81ff9a" target="_blank">watch the video or download the slides here</a>. 
 
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Dear Tony, waving a stick at foreigners won't help first home buyers: Terry Ryder

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Stark reminders keep occurring of just how bad markets have become in mining towns and regional centres with a big reliance on the resources sector.
During our daily research routine, the Hotspotting team came across a local newspaper article which recorded homes for sale as low as $49,000 in Blackwater, a coal-impacted town west of Rockhampton, with an average sale price around $150,000.
Early in 2012 Blackwater had a median house price of $360,000, following a 17% rise in the previous 12 months. The median weekly rent was $675 and typical yields around 10%.
Fast forward three years: the median house price has dropped 28% in the past 12 months and the median weekly rent is now $300, less than half those peak levels, with typical yields about 4.5%. Vacancies have been as high as 8% and are currently 5%.
A few hundred kilometres to the north is Moranbah, the quintessential boom-bust coalmining town. I’ve written about Moranbah’s demise in considerable detail over the past couple of years. Suffice to say that the median house price, once $750,000, is now $285,000 – and the median rental yield, once above 10%, is now 3.65. Ouch.
Towns like this will recover in time, but the current state of the coal industry means a lot of pain for investors who bought in at the peak.
Experienced property analyst Louis Christopher wrote recently about similar agonies for markets in Western Australia. He noted that a house in the resources regional centre of Port Hedland had passed in at auction for $360,000, having been bought four years ago for a reported $1.3 million.
“It's a very sobering result and it could be a sign of worse to come in the Pilbara region if the iron ore price keeps dropping given burgeoning global supply,” he said.
“The modest 1960s fibro home on a 600 sqaure metres block failed to attract buyers, with the Port Hedland market especially vulnerable to the commodities downturn as it is one of the world’s biggest iron ore loading ports. The plunge in the iron ore price and slowing Chinese economy have stifled mining activity and stymied demand for property in Port Headland and other mining towns around the nation.”
Christopher said prices for three-bedroom houses in Port Hedland shot up in 2012 to $1.3 million, but the median is now just over $800,000. That’s a value reduction of half a million dollars for the average Hedland house.
Given that recent auction result, house prices could fall a lot further before they stabilise, Christopher said. This is a warning I have made in this column and elsewhere several times in the past year or so – not just in Port Hedland but also in Karratha and Newman.
It’s important these warnings are heard because spruikers who make their living peddling over-priced dwellings in places like Port Hedland would have us believe that these are growth markets, with double-digit yields available.
The reality is that these markets are still falling and, as Christopher warns, are likely to get worse before they get better.
“The drop in house prices (in Port Hedland) follows plunging demand for rental properties as fly-in workers fly out and stay out,” he said.
He said that asking rents in Port Headland had recorded a “staggering drop”, from a peak of $3,000 per week in early 2012 to $1,250 in February 2015. He predicts they will fall further, as do I.
Christopher says it’s a similar story in Karratha. “While house prices never soared to the extent that they did in Port Headland, three-bedroom houses have plunged 40% over the past three years, down to around $457,000,” he said. “Asking rents for houses have fallen from a peak of $2,000 per week in 2011 to around $900 now. 
“For the property investors who got caught up in the mining boom, the sting will be very painful. It’s a reminder that if you are buying property, the risks of falling prices are very real if the economic cycle turns - especially in boom and bust mining towns where what goes up, invariably comes down.”
The decline in these markets is not just about hard times in the iron ore and coal sectors. It’s also about over-building by developers and a failure to appreciate the full impact of the growing use of FIFO workforces accommodated in temporary workers villages.
Towns in Queensland’s Surat Basin are stark examples. Hotspotting research shows that about a quarter of the population of this region last year comprised FIFO workers – close to 15,000 extra people in the area.
But 94% of them have been accommodated in workers accommodation villages, usually located outside the established towns like Dalby, Chinchilla, Roma and Miles.
Developers built a lot of new dwellings in these towns expecting big demand from the coal seam gas boom. But few of the workers on the gas projects have rented houses in the region’s towns.
The outcome has been vacancies as high as 21% in Chinchilla and 30% in Miles, with rents inevitably heading south. Values are starting to follow.
This phenomenon means that even when commodity prices improve and industries like coal and iron ore start to expand again, it may not fill up all those empty dwellings in Port Hedland and Moranbah.
TERRY RYDER is the founder of <a href="https://hotspotting.com.au/" target="_blank">hotspotting.com.au</a>. You can <a href="https://mailto:ryder@hotspotting.com.au" target="_blank">email him</a> or follow him on <a href="https://www.twitter.com/hotspotting" target="_blank">Twitter</a>.
If you missed our free webinar with Terry Ryder, 'The Best and Worst for 2015: Top 5 Hotspots and 5 Places to Avoid', you can <a href="https://propertyobserver.us2.list-manage.com/track/click?u=24bd0766a834290948593f5aa&amp;id=2e37cb3570&amp;e=035e81ff9a" target="_blank">watch the video or download the slides here</a>.
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Mining town markets going from bad to worse: Terry Ryder

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Is there, anywhere in Australia, an economist who understands residential real estate?
I’m currently conducting a search. I’d like to meet her or him, if they exist. To date I have encountered in my travels myriad economists who don't have even the thinnest veneer of knowledge about residential property or what drives it. Let me know if you can identify one who knows how this industry works.
I met several last week at an event in Sydney. They all held impressive titles in major companies and institutions. None of them had the first clue about residential real estate. It was almost embarrassing to listen to them.
Here is the world of Australian real estate, through the eyes of your (very) average economist:
<ul>
<li>There is one market in the nation. It’s called “the Australian property market”.</li>
<li>The biggest single factor driving this one market is the level of interest rates.</li>
<li>Currently there is a national property boom.</li>
<li>The boom is driven by investor buying.</li>
</ul>
It’s easy to demonstrate that they are wrong on every one of those counts, which tends to render obsolete any other views they express about residential property.
The latest price data published this week by the Australian Bureau of Statistics this week shows that there are many different markets in Australia and there is certainly no national property boom. The ABS data confirms earlier figures from Domain and CoreLogic RP Data.
Sydney’s median price rose 12% last year. Brisbane was up 5%. Every other city was 4% or less, including Perth, Canberra and Darwin which all grew less than 2%.  Even the weighted average for the eight cities is only 6.8%, a moderate growth figure inflated by Sydney’s high number.
It’s hard to construct a national property boom from those figures. But every day in major media you will read someone described as “chief economist” for a bank or other institution talking about “the national property boom”.
Every economist I meet or observe in media defines property in terms of the level of interest rates. Most see it as the sole determinant. They clearly haven’t spent any time studying residential property over the past 30 years. There are periods when sharply rising interest rates have failed to extinguish rising prices and other periods, like right now, when very low interest rates have failed to generate a widespread boom.
If interest rates were the core factor, Australia would be awash with booming markets after a  sustained period of record low interest rates. We clearly don’t have that situation – we have a boom in Sydney and a small number of regional cities.
The other big mistake made by the nation’s gaggle of chattering economists is that they think investors are driving their mythical boom.
In the simplistic mind of your average economist, if two events coincide then one must have caused the other.  There’s a property boom (they think) and the level of investor buying has risen, therefore they must be the cause. The Queensland election result coincided with a rainy period, therefore bad weather caused the demise of Campbell Newman.
The reality is that investors never drive anything in real estate. They never lead, they follow. They’re herd animals.
Owner-occupiers continue to dominate the market, despite what you read. The most recent breakdown of proeprty finance data I saw showed that owner-occupiers account for 61% of loans and investors just 39%.
Sydney’s boom, like most instances of elevated markets in recent Australian history, has been driven by the section of the market that no one ever talks about when looking for culprits for rising prices. They’re not local investors pumped up negative gearing, nor are they foreign investors, nor are they first-home buyers boosted by grants. All those buyer categories are minority parties, with muted influence.
The greatest chunk of the market - now as always – are the next-time buyers (home buyers other than first home buyers) and they are people with the critical mass, financial capacity and motivation to influence markets and drive up prices.
The latest “chief economist” to muddy the waters with misinformation, based more on navel-gazing than knowledge or research, is someone called Paul Bloxham from HSBC. It’s a bank, I think.
Even by the low standards of Australian economists, this was a particularly flimsy effort. It was headlined “Australia’s property boom may get bubbly.” Yes, there we have it again, that strange notion of a natonal property boom in a coutnry where only one city had growth above 5% last year.
<a href="/expert-insights/buying/sydney-prices-to-fall-hsbcs-bubble-warning">According to his report</a>, Sydney prices will fall because interest rates will rise to 2.75% … Sydney prices are over-inflated because there’s a high level of investor activity ... There’s a risk of a bubble … yadda yadda yadda. Not an original thought in the whole piece. Just the same shallow mantra sung by every economist in the land.
The notion that interest rates at 2.75% (still very low by historic standards) would precipitate a downturn is bizarre indeed. But, then, if you think it’s all about interest rates, you really have no one else to go in making a prediction.
If we could somehow prevent economists from speaking about residential property, life for real estate consumers would improve immeasurably. The national level of misinformation, the biggest single problem in the property industry, would collapse.
TERRY RYDER is the founder of <a href="https://hotspotting.com.au/" target="_blank">hotspotting.com.au</a>. You can <a href="https://mailto:ryder@hotspotting.com.au" target="_blank">email him</a> or follow him on <a href="https://www.twitter.com/hotspotting" target="_blank">Twitter</a>.
If you missed our free webinar with Terry Ryder, 'The Best and Worst for 2015: Top 5 Hotspots and 5 Places to Avoid', you can <a href="https://propertyobserver.us2.list-manage.com/track/click?u=24bd0766a834290948593f5aa&amp;id=2e37cb3570&amp;e=035e81ff9a" target="_blank">watch the video or download the slides here</a>.
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Seeking an economist who understands residential real estate: Terry Ryder

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Domain’s most recent price data had Brisbane as the number two capital city on median price growth in 2014 (behind, obviously, Sydney).
It found Brisbane’s price growth has risen to 6.1%, providing another piece of evidence that Brisbane and South East Queensland is the nation’s major rising market.
That in itself is not startling news, as many property analysts and commentators, including me, have been advocating Brisbane as a nation-leading growth centre for 2015.
On 1 December <a href="/expert-insights/buying/the-baton-is-passing-from-sydney-to-south-east-queensland">I wrote on Property Observer</a>:
“There’s a pretty good argument that the hottest property precinct in Australia right now is South East Queensland.
“Brisbane, the Gold Coast, the Sunshine Coast ... All three have hot markets. The research conducted by Hotspotting for the latest edition of the Price Predictor Index revealed 254 suburbs across South East Queensland with rising sales activity. To put that in perspective, the Sydney metropolitan area has 106 growth suburbs.”
So that’s a good starting point. But South East Queensland is a big chunk of territory. As I pointed out on 1 December: “Together they comprise a vast metropolitan area - ongoing urban growth means these three big centres have merged into one big conurbation which starts at the NSW border and extends 250 kilometres north to Noosa.”
So where to place a more focused span of attention? There are myriad options but one that I particularly fancy is the unheralded (indeed often maligned) municipality of Logan City.
The local council sees it as a strategic “city between two cities” because Logan bridges the gap between Brisbane City and Gold Coast City.
It’s a municipality of 60 mostly affordable suburbs and collectively they are a nice fit for <a href="/expert-insights/investing/my-basic-formula-for-identifying-hotspots-terry-ryder">my core formula of affordability + infrastructure + jobs = price growth</a>.
It certainly qualifies on the affordability score. It has numerous suburbs with median house prices below $300,000 and many others in the low-to-mid $300,000s. That affordability attracts a lot of people and its population is tipped to grow from 300,000 to 500,000 over the next 20 years.
An area needs to offer more than cheap housing to qualify as a hotspot and some have unkindly renamed the area Bogan City.
But Logan offers plenty in the way of infrastructure, services and amenities. Logan City is a 35 minute drive from the Brisbane CBD and the Gold coast via the Pacific Motorway - and is also well serviced by buses and trains on the Gold Coast and Beenleigh lines.
The area is especially strong on retail facilities. The Logan Hyperdome is among the largest shopping centres in Australia while furniture and homewares giant Ikea has a large outlet in Springwood. The Logan Mega Centre has 28 retail stores which mostly offer household and furniture outlets, but also camping and sporting goods.
There are plenty of schools throughout the region and there are also an unusually high number of golf courses.
Jobs nodes include Teys Australia, the second largest meat processor and exporter in Australia, based in Beenleigh. Teys, which employs 800 people, was inducted into the Queensland Business Leaders Hall of Fame in December 2014. Another landmark is the Beenleigh Rum Distillery which began operations in 1884.
Logan is also not far to the Gold Coast theme park precinct, which includes Dreamworld and Movieworld.
Investors like Logan City because, in addition to cheap prices and solid growth prospects, it has strong rental yields. Most suburbs have median house yields of 5.5% and above, with several between 6% and 6.5%. The median yield for units in Beenleigh, according to Domain, is 7.1%.
Most of the Logan City postcodes have vacancy rates below 2%, according to SQM Research.
In the past 12 months, a number of the suburbs of Logan City have recorded growth in median house prices between 8% and 12%.
Developers are increasingly targeting this area with large-scale projects, including a $600 million retirement village, a $550 million tourism village, a $200 million residential estate and the new Alma Park Zoo, which is being relocated from the north of Brisbane.
A number of the area’s icons – including the Logan Hyperdome shopping centre, the Beenleigh Rum Distillery and McNevin’s Motel Loganholme – are undertaking expansions.
TERRY RYDER is the founder of <a href="https://hotspotting.com.au/" target="_blank">hotspotting.com.au</a>. You can <a href="https://mailto:ryder@hotspotting.com.au" target="_blank">email him</a> or follow him on <a href="https://www.twitter.com/hotspotting" target="_blank">Twitter</a>.
If you missed our free webinar with Terry Ryder, 'The Best and Worst for 2015: Top 5 Hotspots and 5 Places to Avoid', you can <a href="https://propertyobserver.us2.list-manage.com/track/click?u=24bd0766a834290948593f5aa&amp;id=2e37cb3570&amp;e=035e81ff9a" target="_blank">watch the video or download the slides here</a>.
Picture: Wikimedia Commons.
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A new South East Queensland hotspot? It's time to look at Logan City: Terry Ryder

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I talk a lot about infrastructure in connection with areas we rate as future hotspots. I often refer to infrastructure as the ultimate driver of values in residential property.
Over many years of researching outperforming areas, the Hotspotting team has found that the common denominators of most good growth areas are affordable real estate, good infrastructure (with a bonus of spending on new infrastructure) and proximity to major jobs nodes.
Many hotspots fit this basic formula: affordability + infrastructure + jobs = price growth.
Nothing in real estate is ever quite that simple, but that basic recipe is a pretty good starting point for property investors.
The term “infrastructure” covers all manner of things, but the key elements are transport infrastructure and education-medical infrastructure.
The core impacts of these types of infrastructure is that they create tremendous economic activity and jobs (leading to real estate demand) while under construction and they improve the amenity and appeal of locations once completed.
Transport infrastructure covers roads, tunnels, bridges and rail links which improve the accessibility of areas. Nothing revolutionises the appeal of a location like the creation of new train links.
Last week Channel 7’s Today Tonight interviewed me about my high rating of the suburb of Forrestfield in Perth.
There were two key factors. Apart from the inherently good qualities about this suburb (location, amenities, etc), it stood out in the short-term because of recent rises in sales volumes, leading inevitably to price growth. But, taking a longer-term view, the central factor was the state government decision to create a new rail line linking central Perth to Forrestfield via the airport.
In some ways, education-medical infrastructure is even more influential. I link hospitals and universities together because often they are clustered in the same location in our major cities.
One of the characteristics of this type of infrastructure is that it creates employment while under construction, but even more jobs once completed. Any suburb or precinct with a cluster of major medical and education facilities in its midst has a extraordinary source of accommodation demand. So much activity, including real estate demand, is generated around these types of facilities.
Infrastructure is the chief reason we rate the Sunshine precinct in Melbourne’s west so highly. The area already has a major hospital and two university campuses, but new spending will take this precinct to a new level. Another hospital is planned and an $800 million transport hub is being built as part of the $5 billion Regional Rail Link.
Events like this are game changers for property markets.
Big ticket infrastructure is influential in its own right, but one of the bonus benefits is the new activity it generates. If a major new hospital is built, other development will sprout around it.
Queensland’s Sunshine Coast is a transition economy, one that is evolving from a weak economy reliant on unreliable tourism to one with other strong factors. The game changer there is the $2 billion University Hospital. It’s a significant event by itself but it’s causing all manner of new ventures to spring up in its shadow.
There’s the Oceanside Kawana Health Hub, the $60 million Health and Social Wellbeing Learning Precinct and the $40 million IRT Woodlands retirement community.
These projects are all consequences of the creation of that massive new hospital. A whole new industry is being created and is helping to make the Sunshine Coast one of the most compelling regional economies in Australia.
Investment in infrastructure and property developments in the Sunshine Coast Region totals around $15 billion. No other regional city in Australia comes close to that level of investment (other than Gladstone, where those three huge gas facilities are under construction).
Terry Ryder is the founder of <a href="https://hotspotting.com.au/" target="_blank">hotspotting.com.au</a>. You can <a href="https://mailto:ryder@hotspotting.com.au" target="_blank">email him</a> or follow him on <a href="https://www.twitter.com/hotspotting" target="_blank">Twitter</a>.
If you missed our free webinar with Terry Ryder, 'The Best and Worst for 2015: Top 5 Hotspots and 5 Places to Avoid', you can <a href="https://propertyobserver.us2.list-manage.com/track/click?u=24bd0766a834290948593f5aa&amp;id=2e37cb3570&amp;e=035e81ff9a" target="_blank">watch the video or download the slides here</a>.
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My basic formula for identifying hotspots: Terry Ryder

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One of the specialist property magazines, for lack of an original idea, is featuring what it calls “the age-old stoush” of capital growth v cash flow.
This recurring theme in property media – whether you should buy for good capital growth or for good cashflow prospects – shows a fundamental lack of understanding.
Investors do not have to make that choice. A good property investment will provide both.
There are myriad opportunities around Australia to secure properties that pay their own way and are located in areas with the core drivers to deliver good capital growth as well.
Currently, the best income yields in the nation are found in Cairns. The days of double-digit yields in mining towns and resources-driven regional centres are over, for now at least. Cairns, meanwhile, can readily provide investment properties with gross yields in the 7-8% range.
Cairns is also a strong prospect for ongoing capital growth. The North Queensland centre has a poor record but in hotspotting the recent past is irrelevant. The future is another country.
Cairns’ future will be different from its past because there is fundamental change taking place in the city’s economy. Like others including the Sunshine Coast and Port Macquarie, Cairns is re-inventing itself, so that it is no longer just a tourism town.
Tourism-based economies are fragile and habitually bad real estate performers. It’s only when economies diversify through infrastructure spending and creation of new industries that their real estate performance improves.
Cairns is undergoing that process. There is major spending on infrastructure, city leaders are working hard to encourage economic diversity and, as a bonus, tourism is thriving again.
In New South Wales, Dubbo is one of the strongest regional economies. It offers an attractive package for investors: affordable property with good rental returns, underpinned by a growing population, a strong economy with diversity and plenty of jobs generation.
It’s not too hard to find houses with returns above 6% and the median house price has increased 10% in the past year. In other words, good cashflow and good capital growth is on offer.
At the Victoria-NSW border, Albury-Wodonga is one of the nation’s most important regional economies, underpinned by a strategic location with strong road, rail and air links. Houses are typically priced in the $200,000s and rental yields in the 6-7% range are common.
In the past 12 months, many suburbs including <a href="/news">Lavington</a>, <a href="/news">North Albury</a>, <a href="/news">West Albury</a>, <a href="/news">Wodonga </a>and <a href="/news">West Wodonga</a> recorded median price growth of 8% and above.
There are myriad examples in regional Australia. Toowoomba and Rockhampton in Queensland, Tamworth and Goulburn in NSW, and Bendigo and Ballarat in Victoria, are all strong growing cities that offer the desired combination of good cashflow and superior growth.
It’s a formula that can also be found in capital cities. Brisbane and Adelaide will be among the growth leaders in 2015 and both present options for investors seeking the best of both worlds.
In affordable Logan City, the municipality the bridges the urban gap between Brisbane City and Gold Coast City, eight suburbs have recorded median price growth between 8% and 13% in the past 12 months.
There are also a dozen suburbs with median rental yields in the 5.7% to 6.7% range.
The most compelling location in Adelaide, in terms of 2015 growth prospects, is the municipality of Salisbury in the city’s north. This is an area with good infrastructure and lots of major job nodes. Most of the LGA’s suburbs have median prices below $300,000, with typical yields in the 5.7% to 6.5% range.
Virtually every suburb in this precinct has shown some sort of capital growth in the past year, with more to come in 2015.
The question occupying the minds of property investors is not whether they should chase capital growth or cashflow, but which of many available options should they choose to achieve both.
Terry Ryder is the founder of <a href="https://hotspotting.com.au/" target="_blank">hotspotting.com.au</a>. You can<a href="https://mailto:ryder@hotspotting.com.au" target="_blank">email him</a> or follow him on <a href="https://www.twitter.com/hotspotting" target="_blank">Twitter</a>.
Terry will be participating in a webinar on 'The Best and Worst for 2015: Top 5 Hotspots and 5 Places to Avoid' on 3 February.
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Best of both worlds - the cities where you can find capital growth and cash flow: Terry Ryder

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A NAB survey of residential property markets provides further evidence that media reporting of first home buyer activity is bunkum.
The NAB survey finds that 25% of established homes sold are being bought by first time buyers and that 24% of new homes are bought by first timers.
Some media outlets reported those figures rather nonchalantly last week, without realising the great significance of them. They make nonsense of the data published by the Australian Bureau of Statistics (ABS), which suggests that first home buyers (FHBs) are as low as 10% of properties sold.
That ABS figure is held up repeatedly by commentators and journalists as justification for the claim that the 'Great Australian Dream' is dead, that we have an affordability crisis and that everyone from local investors to Chinese buyers are to blame for pricing FHBs out of the market.
It has also helped to generate a lengthy, expensive and totally pointless federal government inquiry into the so-called housing affordability crisis. That inquiry, which has been exploited by some politicians as a vehicle for grandstanding and career advancement, is based on a lie: that FHB activity is at an all-time low and it’s all because they can’t afford to buy.
The NAB is right and the ABS is wrong. First time buyers are out there as busy as they ever were. The ABS has been publishing a miscount – and, what’s more, it knows it. It has <a href="https://www.propertyobserver.com.au/https://www.abs.gov.au/ausstats/abs@.nsf/mf/5609.0" target="_blank">admitted that its data on first home buyers is suspect</a>.
I’ve explained why a number of times in this column and so too have other writers on Property Observer. The elimination, by most state and territory governments, of FHB grants for established housing (they now provide grants only for new dwellings) means most FHBs are not being counted any more because they’re not applying for grants.
They’re out there buying but are no longer identified as first timers in the ABS statistics.
Now the NAB survey has put some realistic numbers on first time buyer activity. Its survey suggests that, for established housing, 16% of buyers are first home owner occupiers and 8% are first home investors. For new housing, 16% are first home owner occupiers and 9% are first home investors.
First home investors are those who opt to buy an investment property, rather than a home, as a first purchase. Commonly, these are people who prefer to rent in their suburb of choice and buy an investment property in a cheaper area.
This really is a top story for an alert journalist. All the clamour about an affordability crisis and first time buyers disappearing is a furphy, based on a miscount. But most newspapers won’t write the real story because they’re addicted to the “Great Australian Dream is dead” storyline. Sad.
For the record, the NAB survey also finds that overseas buyers are 9% of buyers of established housing and 15% of buyers of new dwellings (mostly inner city apartments).
This puts into perspective those hysterical claims that foreign investors are somehow dominating our markets and pricing poor young Aussies out of the market.
TERRY RYDER is the founder of <a href="https://hotspotting.com.au/">hotspotting.com.au</a>. You can <a href="https://mailto:ryder@hotspotting.com.au" target="_blank">email him</a> or contact him on <a href="https://twitter.com/hotspotting" target="_blank">Twitter</a>.
Terry will be participating in a webinar on 'The Best and Worst for 2015: Top 5 Hotspots and 5 Places to Avoid' on 3 February.
Click here to <a href="/news">register now</a>.
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Terry Ryder

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