Australian Property Market
July 05 - July 18, 2011
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Australian Property Market
Headlines at a glance
July 05 - July 18, 2011
• Renter-investor numbers rise to one in ﬁve: survey.
• Transport drives housing market
• Novice investors unconcerned by price drops.
• Buying a home more important than children
• [Brisbane]: Building boost details conﬁrmed.
• Grant makes dream a reality for ﬁrst home buyers.
• Positive signs for market recovery.
• Queenslanders ﬂying solo with property.
New South Wales
QLD • Buyer activity to increase sooner rather than later.
• Garden apartments are a hit with Sydneysiders.
• First glimpse of Sydney convention and
entertainment centre plans.
• Approval for $130m ofﬁce development at Docklands.
• [Melbourne]: Investment sales soaring.
• UK developer eyes off Australia for super-luxury
TAS apartments site.
• Adelaide’s investment property hotspots
• Adelaide’s rents zoom up to amongst world’s top 50.
• Adelaide has the cheapest rent in Australia.
• Light rail, fewer cars in Perth of the future.
• Miners tighten Perth’s ofﬁce market.
• Property Council welcomes Perth transport plan
Sources used in the compilation of this report:
Adelaide Now | The Courier Mail | Property Observer | Property Council of Australia | Quest Logan | Urbanalyst
Laing Simmons | Architecture & Design | Perth Now | Domain | Seven News | Australian Property Investor
Your Investment Property | Packenham Cardinia Leader |
[Sydney]: Buyer activity to increase sooner rather
July 10, 2011
Latest data indicates that Sydney continues to offer
reasonable prospects for growth in housing market
activity in 2011.
Australian Property Monitors reported that Sydney's median
house price rose by 1.1 per cent over the May quarter. This
was the same increase in median house prices as APM
recorded over the April quarter, and indicates some stability and perhaps growing conﬁdence in the marketplace.
Most of Sydney's suburban districts recorded house price growth over the May quarter, led by the lower north shore
and northern beaches, which rose by 3 per cent. Other measures also point to a steadying of buying activity in the
face of the strong prices growth and interest rate rises that ﬂattened demand through 2010 and into 2011.
Sydney's weekend auction clearance rates have consolidated over the past month and are now consistently around
the levels typical of the relatively quiet winter selling season. The number of properties being offered currently for
auction each weekend is, however, signiﬁcantly lower than at the same time last year, indicating perhaps lower
conﬁdence in the market from sellers.
Key indicators continue to point to a growing likelihood that buyer activity in the Sydney housing market will
increase over the second half of 2011.
In good news for home mortgage holders and prospective home buyers, the Reserve Bank decided, at its meeting last
week, to leave interest rates on hold.
The RBA's ofﬁcial cash rate target has now remained steady for eight months at 4.75 per cent since the last ofﬁcial rise
in November 2010. The outlook for interest rates remains benign. Concerns over the speed, strength and mix of
Australia's economic growth over the shorter term, and ongoing mixed signals on the international economy will likely
see the Reserve Bank sit on its hands for the next few months at least.
Inﬂation is also expected to remain within the lower regions of the Reserve Bank's acceptability range, again
dampening the need for interest rate rises.
The Sydney rental market remains tight, with continuing strong competition for properties putting upward pressure on
rentals. Latest Real Estate Institute of NSW data revealed that the vacancy rates for residences within 10 kilometres of
the Sydney CBD had fallen below 1 per cent.
The shortage of housing is set to continue, with ABS data for May reporting that NSW approved only 1394 private
sector houses for building over the month. NSW has also approved only 3002 units for building so far this year, which
is 26 per cent below the 4677 recorded over the same period last year.
With interest rates on hold, incomes rising, growing populations and a shortage of accommodation, expect increased
buyer activity to emerge in the Sydney housing market sooner rather than later.
**Dr Andrew Wilson is a senior economist for Australian Property Monitors
Adelaide’s investment property hotspots.
July 12, 2011
The latest list of the top 100 Australian suburbs to buy
investment properties are in, and amongst them are
16 suburbs in Adelaide.
Deputy Editor of the Australian Property Investor magazine,
Vanessa De Groot, said while there have been plenty of reports
recently on the property market being sluggish, now is the best
time to buy - because no one else is.
"If you’re thinking about buying, you need to be thinking about the long term, so you need to be looking for a bargain
property in those areas, and then holding out and waiting for capital growth to come back," she told 7News.
"The key indicators that we use for the ‘Hot 100’ are basically growth drivers, so we look at what’s driving growth in
those areas, it could be infrastructure, it could be population growth – so people might be moving there because it’s
more affordable and that’s pushing prices up." "Or it could just be there’s urban renewal, people are coming along and
doing up houses and shops, that makes the area more attractive and more people want to live there and that’s what
pushes prices up."
In no particular order, the suburbs expected to perform well on return as an investment property are:
Clearview Christies Beach Elizabeth Enﬁeld
Kensington Hindmarsh Port Noarlunga Seaford
Semaphore Thebarton Torrensville Unley
Victor Harbor Valley View West Croydon Whyalla
"The South Australian locations are quite varied, so they’re all over Adelaide, some are regional, so a lot of them are
affordable," Ms De Groot said. "In particular in Adelaide there’s a lot of infrastructure going on and that’s what pushing
along a lot of suburbs." "To the south you’ve got Christies Beach and Seaford and those areas are particularly
supposed to do well because there’s several projects going on down there, there’s the duplication of the expressway,
there’s the rail line going down there and that will mean more people will move there."
Looking at the 2010 list, for the top 100 suburbs to invest in, and the results are similar, although SA had a smaller
representation with only 11 suburbs making the cut.
Bowden Christies Beach Elizabeth Greenacres
Hindmarsh North Adelaide Port Adelaide Precinct Port Noarlunga
Seaford Thebarton Torrensville
Ms De Groot says when looking for a suburb to buy an investment property in, the magazine's list is a good guide, but
there are no guarantees. "We can’t guarantee that they will obviously grow in value, but if you look for the key drivers
then you’re pretty sure you’ve got a good investment... So looking for that infrastructure, for population growth and for
urban renewal," she said.
[Brisbane]: Positive signs for market recovery.
July 06, 2011
A mild improvement in house prices
is forecast for the Brisbane region
by next year as signs point to a
recovery in the market, according to
a new report.
The report, Residential Property
Prospects, 2011 to 2014 by national
business researchers BIS Shrapnel,
states the Brisbane median house price
for June 2011 stands at $440,000, a
decline of 4 per cent from the previous
year and arguably the weakest of the
But senior manager Angie Zigomanis,
who compiled the study, is predicting a
``The next round of investment in
new resource projects is expected to
commence in 2011, economic conditions
are also forecast to improve, and the ensuing employment and income growth will create a greater level of
purchaser conﬁdence,'' Mr Zigomanis said.
First-home buyers are also predicted to return to the market.
``If higher interest rates mean they can't afford their ﬁrst choice of dwelling initially, then they will purchase a more
affordable type of dwelling and/or in a more affordable neighbourhood,'' he says.
This sentiment is echoed by the Urban Development Institute of Australia (UDIA) Queensland's Development and
Construction Industry Report, which says ``the worst is behind us'' and there is reason to be ``cautiously
optimistic'' of improvement before the end of 2011.
Ray White Queensland joint chief executive ofﬁcer Peter Camphin said the market has hit the bottom and can
only go up.
``There is a lack of conﬁdence and bad sentiment going round the market at the moment,'' he said.
However, Mr Camphin said ﬁrst home buyers would always guarantee a turnover of property.
[Brisbane]: Building Boost details conﬁrmed.
Staff Writer - Property Council of Australia
July 14, 2011
Following discussions with the Property Council
the Queensland Treasurer has conﬁrmed important
changes to the eligibility criteria for the
Queensland Building Boost (QBB).
These changes will result in a much larger pool of
projects being ‘boost eligible’.
The details announced by the Treasurer are:
1. An extension of the construction completion
deadline for multi-unit residential projects
which was initially set at 31 July 2013. These
projects will now have until 31 January 2015
to be completed. However a new requirement
that construction must commence by 31 January 2013 has been added. Both of these changes
are in line with the Property Council’s recommendations to the Treasurer.
2. Conﬁrmation that National Rental Affordability Scheme (NRAS) projects are ‘boost eligible’.
3. A change to the eligibility criteria which will enable all Australian residents to access the boost,
not just Queensland residents.
Queensland Executive Director of the Property Council of Australia Kathy Mac Dermott has welcomed the details
announced by the Treasurer.
“By ﬁne tuning the construction timeframes, and opening up the criteria to NRAS projects and interstate
residents, the Treasurer has maximised the potential of the QBB to kick start our construction industry,” Ms Mac
“The Property Council commends the Treasurer and ofﬁcers at the Ofﬁce of State Revenue for their willingness to
engage thoughtfully on these issues.
“We look forward to playing our part in promoting the QBB across the country once it is ofﬁcially launched.”
[Australia]: Transport drives housing market.
July 16, 2011
WITH the rising cost of fuel and concerns about the harm private motor vehicles can do to the
environment, for those who can't afford to live closer to their place of work, living closer to public
transport is becoming more important.
Buying a house is no longer just about liking the actual home, how many bedrooms it has and the suburb, people
are choosing a property based on how it ﬁts into their lifestyle, according to PRDnationwide research. It found the
top of the list for 57 per cent of house hunters was access to public transport. About 16 per cent felt having a
supermarket close by was paramount while 12 per cent wanted a cafe or restaurant close to home.
Only 8 per cent wanted a school close by.
PRDnationwide research director Aaron Maskrey says increasingly congested roads and rising fuel costs were
pushing public transport higher on buyers lists - and suburbs which offered multiple public transport options were
most popular. "A reliable train, bus or ferry terminal nearby can add thousands to the purchase price and create
greater competition for the property," he says.
Maskrey says people's lives are busier than ever and they were craving convenience. But while Maskrey says
public transport is important it has to be an efﬁcient system to win buyers over. He says Australian Bureau of
Statistics ﬁgures reveal 80 per cent of people aged 18 years and over use a private vehicle to travel to work or
study. Fourteen per cent take public transport and 6 per cent either walk or cycle.
"However, with the cost of fuel increasing, the high costs of long-term parking and congestion affecting the masses
with in metropolitan locations, sentiment towards public transport is shifting, ultimately affecting a buyer's
purchasing decision when buying a property that is located within close proximity to public transport nodes," he
said. Maskrey said investors had caught on to the trend some time ago and had focused on buying strategically
located properties within a short walk of transport and facilities to best maximise their rental returns.
Buyers agent Scott McGeever of Property Searchers says among his clients access to public transport is raised
"110 per cent" of the time. He says buyers want the ﬂexibility to be able to get that access to work via public
transport. He says the majority of clients are buying within a 12km radius of the Brisbane CBD.
For investors access to public transport means better capital growth for their property so it is also
paramount to them.
Maskrey says Transit Oriented Developments (TODs) are growing in popularity with a number of projects drawing
great interest as well as selling well. Transit Oriented Developments are built next to transport hubs and are mixed-
use developments with high-density residential apartments, and other amenity including ofﬁce space, dining and
retail. He says TODs are often more appealing to investors because they are appealing to renters.
According to the latest Midwood report, new developments either underway or for sale near public transport are
achieving solid sales. In Bowen Hills near the railway station and close to the massive RNA redevelopment, the
Code project in Jeays St has secured 100 sales of its 132 units to date. Madison Heights on Campbell St has sold
40 apartments and The Chelsea at Hamilton Place has sold 148.
The Milton on Railway Tce, Milton, has secured 55 sales and The Mill next to the Albion railway station is taking
expressions of interest. The Eldorado Village development opposite the Indooroopilly railway station and within
walking distance of Indooroopilly Shopping Town has secured 66 sales. Meanwhile, in Fortitude Valley, there have
been 110 sales at Mosaic on Ann St and at the nearby McLachlan & Ann project there have been 160 sales.
First glimpse of Sydney convention & entertainment
July 10, 2011
Concept plans for a $900 million convention and
entertainment centre at Darling Harbour were
unveiled by the NSW government last week.
The new facility will be constructed on the site of the
existing Entertainment Centre car park and when
complete the current centre will be pulled down to make
way for green space and “new investment opportunities”.
The NSW State Government claims the signiﬁcant development will put Sydney on track to becoming the entertainment
and events capital of the Asia-Paciﬁc. Preliminary schematic diagrams of the proposed concept for the centre, as
prepared by Cox Richardson
The plan includes seating for up to 12,000 people, a multi-function exhibit hall of up to 12,000 sqm, and it is expected
the centre will host conventions, rock concerts and sporting events such as basketball, tennis and boxing. The project
was ﬂagged in 2010, with Cox Richardson engaged to prepare options for the redevelopment.
The building cost outlines in the plans is around $560 million, although the completed facilities were said to be worth
$900 million by the Sydney Morning Herald. The decision was taken to demolish rather than upgrade the existing
entertainment centre largely because of the opportunity to use that site for private sector opportunities and to enhance
the public domain and connectivity to the wider harbour precinct.
According to the planning documents, other key elements of the SMCEC will include:
• delivery of a number of important public domain enhancements, the most signiﬁcant being the creation of a
plaza or public gathering space adjacent to the SMCEC, usable as open public space and pre or post function
• improved connectivity and linkages to surrounding areas, including signiﬁcantly enhanced connections through
to Darling Harbour; and
• provision of other uses, such as hotel and retail uses, intended to enliven the precinct and support the central
Design excellence is a key requirement of the government brief, with the redevelopment being touted as an ¨opportunity
to deliver an iconic building with a distinctive landmark quality and a platform for world-class architecture¨.
NSW Planning Minister Brad Hazzard met with industry
leaders to discuss plans for the centre last week.
"We are engaging with industry leaders to share our plans,
open them up to critique and draw on the expertise of the
state's leading professionals," Hazzard said.
"It's an opportunity for industry to engage – but more
importantly, for the government to make use of the state's
brightest and boldest minds."
The Government is now preparing to call for expressions of
interest to deliver the facility.
Renter-investor numbers rise to one in ﬁve: survey
July 11, 2011
The renter-investor market looks set to nearly double in size over the next two years, according to a survey of
ﬁrst-time investors carried out by Mortgage Choice.
Out of 1,060 respondents who plan to buy their ﬁrst investment property over the next two years, 19% will be making
their ﬁrst home purchase.
Earlier this year, Terry Burke, professor of housing studies at Swinburne University, estimated 11% of all residential
properties are purchased by people who rent their own homes.
The renter-investor market is strongest in Sydney, where 29% of respondents say buying an investment property will
be their ﬁrst home purchase, followed closely by Queensland’s Sunshine Coast (28%) and Melbourne (25%).
Investors are evenly split as to where they plan to buy their ﬁrst property, with Queensland (22%), followed by Victoria
(20%), South Australia (18.4%), NSW (18%) and WA (18%).
While the majority of investors plan to buy in the metropolitan region or state they live in, more than one in 10 (12.5%)
Victorian investors plan to buy their ﬁrst property in Queensland and a third of Northern Territory investors also favour
the Sunshine state over their own backyard.
Mortgage Choice spokesperson Kristy Sheppard says the survey revealed that ﬁrst-time property investors are “logical,
well-planned, long-term thinkers who were determined, careful researchers and aware of their limitations”. “This
maybe why so many are buying for investment purposes before becoming a home owner,” she says.
According to Mortgage Choice, 84% of ﬁrst-time investors already knew how much of an interest rate buffer they were
going to factor into their repayment budget, and only 2% are not putting in a buffer. Furthermore, 47% are looking to
hold onto the property for 10 years or longer and 43% are looking at ﬁve to 10 years.”
Smartline Personal Mortgage Advisors has also noted a growing number of renter-investors, driven by a desire to live
nearer to suburbs that suit their lifestyle and nearer to their workplaces. Managing director Chris Acret says there are
also ﬁnancial incentives: if properties are held for longer, investors can draw on the equity to fund a home or additional
investment properties and avoid paying selling costs and capital gains tax.
“There are also a range of options available to minimise cashﬂow shortfalls when owning an investment property, such
as making interest-only payments, maintaining depreciation schedules, conducting regular rent reviews, and having tax
adjustments paid back to you monthly,” he says.
Other key results from the Mortgage Choice survey are:
• 44% of ﬁrst-time investors are not concerned by falling property prices and 40% are only a little bothered
• 23% will purchase alone, 69% will buy with a partner and 5% will buy with friends
• The most common ﬁnance strategy is borrowing while using equity in their home as security
• 31% will use a mortgage broker for the purchase and 48% might use a broker
• 69% will make, or are already making, lifestyle sacriﬁces in order to buy
• Favourite property type is a small house of one to three bedrooms
• Top two property features were tenant demand in the area and right suburb and street.
Light rail, fewer cars in Perth of the future.
Chris robinson and AAP
July 14, 2011
A $4.1 BILLION, 20-year vision for Perth's
public transport system, which is to include
light rail and rapid transit buses, has been
criticised for not doing enough immediately
to solve the city's trafﬁc woes.
Transport Minister Troy Buswell released the
Public Transport Network Plan for Perth today,
saying it was a ``challenge'' to provide public
transport for a growing city where demand
Mr Buswell said the capital cost alone for
infrastructure and rolling stock was about
$4.1 billion. CONCEPT: Light rail is part of WA’s public transport masterplan, released today.
``I can't commit future governments to
$4.1 billion, but what I can say is that I think this public transport plan represents a compelling case to support that
investment,'' he said. ``If we want to be a 21st century city, then we need to have a 21st century public transport
platform. Good cities have good public transport systems.''
Mr Buswell said public transport use in Perth had increased by 67 per cent in the past 10 years.
By 2031, residents would more than double their use of public transport, which would account for nearly 70 per cent
of all trips to the Perth CBD, he said.
Projects to be undertaken by the government include the extension of heavy rail north to Yanchep, planning for a light
rail network starting with the central north corridor to Mirrabooka, and a bus rapid transit system along the
northeastern corridor to Ellenbrook.
The government is to use $11 million allocated in the 2011-12 state budget for the three priority projects.
Mr Buswell said government planners were also working on a route for a rail line from the city to Perth airport.
Other initiatives include 180 route kilometres of bus priority infrastructure, new train stations and bus interchanges, and
an expansion of the bus and train ﬂeet.
Opposition transport spokesman Ken Travers criticised the plan for lacking vision and accused the Government of
breaking election promises regarding rail infrastructure.
“We needed a vision for the future that built a heavy rail network, with a light rail route along major activity corridors and
buses feeding into this system,” he said. “The WA public will be dismayed that this plan has no real action.”
Mr Travers said he was disappointed the plan did not include provisions for promised stations at South Perth and
Canning Vale, as well as the absence of a heavy rail line to Ellenbrook. “The plan lacks any money or a detailed
timeframe for construction of any light rail to commence,” he said.
Light rail, fewer cars in Perth of the future.
“The plan also fails to provide a long term vision for a heavy rail system. “The lack of action on a rail line to Ellenbrook
or Perth Airport highlights the Liberal Party’s hostility to rail.”
Curtin-Monash Accident Research Centre director Brett Hughes praised the “solid, strategic public transport plan” but
said he was surprised and disappointed at the lack of attention given to safety.
“The public transport plan should identify the safety issues which will be improved and the measures by which they will
be achieved,” he said. “The plan does not describe any speciﬁc safety or security initiatives. “Road safety will beneﬁt
from improved public transport, which is hardly recognised in the plan.
“Bus and rail transport is safer than travel by car, so greater use of public transport will reduce the number of crashes
resulting in fewer Western Australians being killed or seriously injured. “While the plan recognises these as a dollar
value, the numbers of people affected are not described, which is surely more important.”
Greens transport spokesman Scott Ludlam said while his party supported the government's plans, ity wanted the
project brought forward and begun immediately. ``People see the abundant beneﬁts of light rail and want it to be a
signiﬁcant component of Perth's future transport, and they wonder why these projects are going ahead in the eastern
states but not here,'' he said.
Senator Ludlam said while 40 kilometres of light rail was good news, most of the investment would not come until
another two or three elections from now. ``People need choice and public transport alternatives now, not in 2031,'' he
said. Senator Ludlam said the people of Fremantle, Cockburn, Melville and Stirling would also be disappointed that
they had been denied light rail.
Conservation Council of WA director Piers Verstegen agreed that although the plan was a step in the right direction
towards a more balanced and sustainable transport system for Perth's future, it should begin immediately.
``Western Australians are looking for low-carbon, sustainable public transport solutions that reduce their reliance on the
motor vehicle and reduce their petrol bills now,'' he said.
Curtin University sustainability professor Peter Newman said it was a ``dramatic step forward'' to commit Perth to a
light rail system. ``There is a global light rail revolution occurring and we are likely to be well behind other Australian
cities,'' Prof Newman said.
However, Prof Newman said the plan made some predictions for public transport growth that were far below current
trends. ``Eight per cent growth is happening and 3.85 per cent growth is predicted,'' he said.
Opposition Leader Eric Ripper has put forward an alternative transport plan for Perth, featuring a circle rail line diverting
around the city centre to connect with growing employment zones. ``The new rail line would allow people to travel east
and west across Perth without having to travel into the city centre and out again,'' Mr Ripper said on Wednesday.
However, Mr Buswell said the government could never afford the capital cost. ``It is a hastily thought-out, ill-conceived
plan,'' he said. ``I'm surprised that a modern, contemporary political party would put that forward as a transport
[Melbourne]: UK developer eyes off Australia for
super-luxury apartments site.
July 12, 2011
Billionaire UK property developer Nick Candy is seeking an
Australian partner for a super-luxury apartment development,
with Melbourne looking the most likely location.
Candy has already looked at a development site in Sydney and
met with developer Lend Lease six months ago, but no deal
eventuated. However, recent comments from Candy suggest he
could now be eyeing Melbourne as a favoured location, telling the
AFR he was “very impressed” when he visited the city two years
ago. “I was very impressed by the quality of the restaurants, the
quality of the hotels. In some respects, I would say that
Melbourne is even more international than Sydney,” Candy said. Nick and Christian Candy. Source: supplied.
Any development would most likely eclipse Melbourne’s most expensive apartment complexes, the Melburnian in St
Kilda, where a 465-square metre-penthouse changed hands for $15 million (or $32,000 per square metre) in 2009 and
the Salta Properties development at 150 Clarendon Street, in East Melbourne.
"[The Salta Properties development] is the most expensive apartment in recent memory," says Andrew Leoncelli
CBRE’s director of residential Projects Victoria. "The Salta development comprised of 86 apartments which had an
average sale price of $5 million an apartment with ﬁve apartments sold for well over $10 million," he tells Property
Observer. Commenting on a possible Candy-led development, Leoncelli says "sophistication and luxury are part of
everyday Melbourne life and a quality development that embodied this lifestyle would be well received".
Nick Candy, the chief executive of interior designer Candy & Candy and private developer CPC Group, is behind One
Hyde Park in Knightsbridge, Central London, which has been labelled the world’s most expensive apartment complex.
Floor space at One Hyde Park is selling for $96,000 per square metre. Apartment sales to date total £1.1 billion ($1.64
billion) with buyers hailing from Russia, Asia, Europe and the Middle East.
Candy built One Hyde Park with his brother Christian in partnership with Qatar prime minister Sheik Hamada bin
Jassim bin Jabr Al-Thani. One Hyde Park took four years to build at a cost of £1.1 billion. Glazing and cladding alone
cost £100 million. At the peak of its development, 2,500 worked on site. It is located on one hectare of land at 100
Knightsbridge Road, with Hyde Park directly behind it, and just a short walk from Harrods and Harvey Nichols. It
consists of 86 apartments within four diamond-shaped pavilions, including four penthouses.
The apartments vary in size from 9,500 square feet over a single ﬂoor, with penthouses up to 30,000 square feet.
It houses the Mandarin Oriental hotel – the ﬁrst of the chain to be opened in Europe – and retail tenants include Rolex,
McLaren Automotive and Abu Dhabi Islamic Bank. Following the apartment sales, loans from three banks to ﬁnance
the development have been paid off.
The Candy brothers used a £6,000 loan from their grandmother to start renovating ﬂats in London 15 years ago.
They sold their ﬁrst £1 million apartment in Knightsbridge in the late 1990s.
Not all developments have yielded success. Last year ﬁnancing for a $933 million project in Beverly Hills fell through,
with CPC Group forced to sell the site at a loss of $300 million.
Candy is currently in Sydney for the movie debut of girlfriend and former Neighbours star Holly Valance.
Adelaide has the cheapest rent in Australia
July 12, 2011
ADELAIDE is the most affordable capital city for renting houses, industry data shows.
And, along with Hobart, it has the lowest capital city median rent price a week. Adelaide's median house rental price
stands at $330 a week and $290 for units, the RP Data June Quarter Rent Review reveals.
The ﬁgures for Adelaide are the same as last quarter, but are up by 3.1 per cent for houses and 3.6 per cent for units
on last year's results. The most expensive rents nationally were recorded in Darwin at $520 for houses and Sydney
at $450 for units.
Report author Cameron Kusher said although the market had been ﬂat in the past few years, it was up for the
quarter with rents increasing nationally by 2.9 per cent. "As many investors will be aware, rental growth has been
relatively subdued since 2008 due to a number of factors such as stimulus from low interest rates and the First
Home Owner's Grant Boost which enticed prospective new home owners into buying and eased demand for
rentals," he said. "But rental growth is starting to go up and these are the best ﬁgures we've seen in the last two, to
two and a half years."
Mr Kusher said high demand for rental properties, as a result of tight capital city vacancy rates and relatively inactive
ﬁrst home buyer numbers, would result in the ﬁgures showing further growth this year. "People tend to be staying in
the rental market instead of jumping into home ownership, and especially in Adelaide where rental prices are still so
low, particularly compared to anywhere in mainland Australia, it's still much cheaper than buying."
[Melbourne]: Approval for $130 million ofﬁce
development at Docklands.
Junly 13, 2011
VICTORIAN Planning Minister Matthew Guy this week granted a permit for the development of a $130 million,
19 storey ofﬁce tower and retail space for Collins Square, Docklands.
The 19 storey (90 metre) building will be home to ﬁnancial services group Marsh Mercer and comprise almost
40,000 square metres of ﬂoor space including ground ﬂoor retail uses with a Collins Street frontage. "The proposed
development provides for important commercial ﬂoorspace in Melbourne and creates jobs in a central location area
supported by existing infrastructure and transport," Mr Guy said. "The Bates Smart-designed building will ﬁll a void
in the Collins Street frontage and Collins Square embraces the Melbourne ideal of creating through links and
laneways between developments," the Minister said.
The building is part of the Collins Square development, a 180,000 square metre Docklands area bounded by Collins
Street, Aurora Lane, Flinders Street and Batman's Hill Drive. Mr Guy said the total Collins Square project had an
estimated development cost of $1 billion and was expected to generate approximately 1,500 construction industry
jobs over the life of the project. The Collins Square Outline Development Plan allows for 10,929 square metres of
retail space, 176,651 square metres of commercial space and parking for 648 cars.
Queenslanders ﬂying solo with property.
July 15, 2011
QUEENSLAND investment property
buyers are more likely to do it on
their own than buyers in any other
state, a new survey has revealed.
According to the Mortgage Choice
survey of Queenslanders who will buy
their ﬁrst investment property in the
next two years, for about 13 per cent
of them it will be their ﬁrst property
The ﬁrst-time property investors
survey questioned investors who
intended to buy before July 2013.
While Queenslanders - such as home buyer Gerogina Scott - might be a bit nervious about taking the plunge
The biggest motivator was to set they are more likely to do so on their own than buyers from other states.
themselves up ﬁnancially, with
about 60 per cent of respondents seeing more beneﬁt in investment properties than shares.
Tax beneﬁts also ﬁgured highly in their reasoning.
The biggest concerns potential investors had were costs of living going up, interest rates, economic management by
government and job security.
About 7 per cent were concerned about the economic management of the State Government in Queensland - the
highest level of concern of any state.
The ﬁgures come as it has been revealed that ﬁrst home buyer numbers have plummeted this year.
According to RateCity analysis of Australian Bureau of Statistics ﬁgures in May this year there were 1333 new ﬁrst
home buyers entering the market in Queensland with an average mortgage size of $276,800.
There were 11,094 fewer ﬁrst home buyers in Queensland to enter the market in the 12 months to May 2011,
compared to 2010 - a drop of 41.5 per cent.
Compared with the national ﬁgure, Queensland saw a bigger drop in the number of ﬁrst home buyers in the year to
May 2011 compared with the year to May 2010.
RateCity's CEO, Damian Smith, said ﬁrst home buyers remained nervous about taking the plunge on property.
[Melbourne]: Investment sales soaring.
July 11, 2011
Sales of big-ticket commercial properties more than
quadrupled between the ﬁrst and second quarters of
this year, CB Richard Ellis research has found.
Investment sales of more than $20 million in the ofﬁce, retail
and industrial sectors reached $2.7 billion in the second
quarter, a 432 per cent increase on the ﬁrst quarter’s $638
million turnover. And turnover for the 2010-2011 ﬁnancial
year reached $8.9 billion, 32 per cent higher than the
previous ﬁnancial year.
Melbourne dominated the market in the second quarter,
This property at 18-20 Prospect St, box Hill has been sold for $8.1 million.
continuing to enjoy the biggest single share of investment
turnover with 41 per cent.
CBRE global research and consulting executive director Kevin Stanley said the turnover for this year’s ﬁrst quarter -
typically a quiet time - had been the lowest for almost 20 years. Queensland’s ﬂoods and cyclones, the Japanese and
New Zealand earthquakes and “general global uncertainty” were partly to blame, Mr Stanley said.
Many mid-to-major transactions that had been in the pipeline since late last year were wrapped up in the second
quarter, contributing to the spike in sales. CBRE’s analysis found that across Australia in the second quarter:
• THE ofﬁce sector dominated sales, accounting for 52 per cent of turnover;
• THE retail sector experienced improved sales, accounting for 40 per cent of turnover;
• INDUSTRIAL sales were slightly below average at 8 per cent; and
• FOREIGN investors continued to be major players, buying 37 per cent of properties by volume against a
long-term average of 10 to 15 per cent.
CUT TO THE FRINGE
Big businesses will need to look outside the CBD for ofﬁce space over the next ﬁve years as rents soar, according to
CB Richard Ellis. The company predicts rents in city centres will grow by 12 to 24 per cent during the next three to ﬁve
years. As vacancy levels fall, space with green credentials and large enough ﬂoorplates will also become less available.
With CBRE research showing comparable gross rents in CBD fringe suburbs average 32 per cent less than in the
CBD, global research and consulting executive director Kevin Stanley said big businesses could be pushed to the
fringe or forced to split operations between a CBD head ofﬁce and city fringe premises for other functions. “Looking
back, the gap between CBD rents and the fringe markets never closes,” Mr Stanley said. St Kilda Rd demonstrated a
big gap, with its rents 35 per cent lower than in the CBD.
On the other hand, CBRE’s national survey found the smallest gap between CBD and city fringe ofﬁce rents was in
Southbank, where the gap between its rents and those in the CBD is 18 per cent.
Mr Stanley said that could be attributed to higher-quality buildings being constructed in Southbank in recent years.
OFFICE DEMAND PEAKS AT BOX HILL
Box Hill has recorded the lowest ofﬁce vacancy rate in Australia, Colliers International research shows. The suburb has
a vacancy rate of just 1.38 per cent for its 150,000sq m of ofﬁce space. Colliers Melbourne East director in charge
Rob Joyes said demand in Box Hill had already led to rent increases of 10 to 15 per cent during the past year, with
more rental growth expected.
Mr Joyes and colleague Peter Bremner recently sold the building at 18-20 Prospect St, Box Hill, for $8.1 million off
market. It was buyer Vantage Property Investment’s ﬁfth Box Hill purchase. Mr Joyes said sales of $5 million-plus
ofﬁce properties in the Melbourne metropolitan market had been slow compared with 2010. Ten such properties, or
$80 million in total, had sold so far this year, compared with 25 ($340 million in total) during 2010. Mr Joyes put the
slower sales down to hesitancy around rising interest rates, barriers in accessing ﬁnance and a lack of quality listings.
Kliger Wood Real Estate’s Russell Meerkin, in conjunction with Kelly & Shiel, has sold at auction the double-storey
brick building on 116sq m at 231 Lygon St, Carlton, for $1.9 million on behalf of a family that had owned it for more
than 50 years. The building is leased to Intrepid Travel at $70,304 (plus GST) a year.
Axis Property’s Daniel Liberman has sold at auction a double-storey brick shop at 194 High St, Ashburton, for
$1.7 million - another property that has not been on the market for more than 50 years. The shop, on a 200sq m
site, is leased to Formal Wear of Melbourne at $50,400 (plus outgoings, except for building insurance). Colliers
International’s Nick Saunders and Cameron Hunter have sold a 120sq m vacant building at 15 Little Hyde St,
Yarraville, for $252,000 to GA Richardson Building Contractors, which plans to occupy it. The property was sold
under the hammer.
Novice investors unconcerned by price drops.
July 13, 2011
Eight out of ten prospective property investors are unconcerned or only a little bothered by falling property
prices, according to a new survey.
A survey of 1,060 ﬁrst time property investors by broker Mortgage Choice has revealed that the top concerns for
novice investors are the cost of living and interest rates, with most being unrufﬂed by the current property market.
Coping with mortgage payments was also a key issue, with 84% of the already knew how much of an interest rate
buffer they were going to factor into their repayment budget. Nearly 60% are able to cope with an interest rate rise of
up to 2%.
When asked for their top desired property features, respondents ranked them as follows:
• Tenant demand in the area – 58% of respondents.
• In the right suburb and street – 57%.
• Locality to amenities and entertainment, ie. cafes, restaurants, etc – 57%.
• Population growth in the area – 46%.
• Infrastructure going into the area – 44%.
The number one motivator to buy was ‘I want to set myself up ﬁnancially for the future’ (82%), then ‘I see more beneﬁt
in investments such as property than in I do shares’ (57%). One-ﬁfth of respondent would be buying an investment
property as their ﬁrst-ever property purchase.
"Once we’d delved into the results, the description that came to mind for these ﬁrst time property investors was logical,
well-planned, long term thinkers who were determined, careful researchers and aware of their limitations," said
Mortgage Choice spokesperson Kristy Sheppard. "They are making educated choices based on a long term
commitment to their property cause and are thinking with their heads rather than hearts. All are vital attributes of a
Adelaide’s rents zoom up to amongst world’s top 50
July 13, 2011
ADELAIDE'S tight property rental market has been noted in a 2011 global survey of affordability for expatriate
Adelaide is now the 46th most expensive city in the world, up from 90th in 2010, the survey by ﬁnancial consultants
Mercer has found.
The high Australian dollar pushed up costs in all Australian cities but Mercer senior researcher Nathalie Constantin-
Mitral, who compiles the ranking, singled out Adelaide as having risen the most. "A dramatic increase in rental prices
has pushed Australian cities up the ranking, especially in Adelaide where market supply is extremely low," she said.
Sydney is 14th, Perth 30th, Melbourne 21st and Brisbane 31st. Luanda in Angola is the world's most expensive city.
In the oil rich west African nation, accommodation of the standard expected by expatriates is in extremely short supply.
Tokyo is second globally, N'Djamena in Chad was in third place, Moscow fourth and Geneva ﬁfth.
The Mercer survey covers 214 cities across ﬁve continents and measures the comparative cost of over 200 items in
each location, including housing, transport, food, clothing, household goods and entertainment.
It uses New York as a base from which to compare cities.
It is designed to help multinational companies and governments set salary package levels for their expatriate
The Mercer survey mirrors ﬁndings published last week by the Economist Intelligence Unit.
Its more limited list of cities placed Sydney sixth in the world, Melbourne seventh and Adelaide 24th.
Miners tighten Perth’s ofﬁce market.
July 13, 2011
PERTH, the tightest CBD ofﬁce market in the country,
has been squeezed even further amid recording the
strongest growth in rents nationwide.
Statistics released by global property group Jones Lang
LaSalle indicated that Perth’s CBD, which became
Australia’s tightest CBD ofﬁce market in the ﬁrst quarter,
saw a further reduction in vacancy from 5.6 per cent in the
ﬁrst quarter 2011 to 5.4 per cent in the second quarter.
JLL national head of ofﬁce leasing, Kevin George said the
large resource companies continue to be very active.
“Investment spending in the sector remains at very high
levels and businesses are moving quickly to secure space
to accommodate their expected increase in head count,”
Prime gross effective rents in Perth increased by 3.9 per cent in the second quarter and have risen by 11.2 per cent
since the trough in the rental cycle was recorded in Q3 2010. “The next 12 months will see further rent escalations in
Perth,” Mr George said.
“There is a perception that the completion of City Square North and Bank West Tower in 2012 will release signiﬁcant
amounts of backﬁll space. “I expect that a large proportion of the backﬁll space will be pre-leased prior to availability.”
Across CBD ofﬁce markets, positive net absorption of 24,800 square metres was recorded in Q2.
Whilst the quarterly net absorption was well down on recent quarters, net absorption in the 2010-11 ﬁnancial year was
279,700 sqm. As a result of increased backﬁll space availability, the national CBD ofﬁce market vacancy rate
increased slightly to 7.6 per cent in Q2 2011 from 7.4 per cent in Q1.
Sydney recorded the strongest net absorption in Q2 (28,900 sqm). In the 2010-11 ﬁnancial year, the Sydney CBD
recorded 99,800 sqm of net absorption, or 37 per cent of the national total.
In Q2, the Melbourne CBD recorded a negative 11,600 sqm of net absorption and a rise in vacancy to 6.0 per cent.
The negative result in the Melbourne CBD was largely attributed to the relocation of the Spotless Group from 350
Queen Street to St Kilda Road.
In Adelaide, vacancy increased marginally to 7.0 per cent in Q2. However, the vacancy rate remains below the long-
term average and has resulted in prime gross effective rents rising by 2.5 per cent in the quarter and 9.4 per cent over
the past 12 months.
“Australian ofﬁce markets have very low levels of spare capacity for this stage of the recovery compared to the vacancy
peaks of previous market downturns,” Mr George said.
“The legacy of the GFC will be limited completions in 2012 and 2013.”
Grant makes dream a reality for ﬁrst home buyers.
July 15, 2011
Alyce Arrowsmith probably wouldn't have considered buying land if it
wasn't for the State Government's $10,000 Building Boost Grant.
Ms Arrowsmith, 21, and her partner Christopher Hendey, 19, have bought
a block in the Sanctuary estate in Woodlands, Waterford, intending to
move from Daisy Hill.
The couple were looking at established property before hearing of the
grant, which comes into effect on August 1 and runs until January 31 next
year on new property priced below $600,000.
``Before, it was nearly impossible for us to buy, because you have to save
so much to buy the land up front,'' she said. ``We're pretty picky, and we
really wanted to make something our own.'' Alyce Arrowsmith and Chris Hendey are buying their ﬁrst home at
the Woodlands Estate, Waterford. Picture: Jim Campey. source:
The grant, announced in the State Budget in June, is intended to help the
ailing Australian building industry. In May total building approvals slumped to their lowest monthly total since June 2009, according
to the Housing Industry Association. However, the HIA's quarterly Queensland State Outlook Report predicts a recovery. Acting
HIA executive director (Qld) Mike Roberts forecasts that housing starts will recover by 10 per cent in 2012-13 to a level of 29,800
and by 15 per cent in 2013 to 32,100. New homes completed by July 13, 2013 are eligible for the grant.
Garden Apartments are a hit with Sydneysiders.
June 26, 2011
According to recent industry research, parks, gardens and green spaces are at the top of the list of wants for
prospective city apartment buyers in Sydney.
Sydney is venturing boldly into the green city territory, with many developers attempting to meet their clients wish lists
of apartment features, which no longer highlight large eat-in kitchens and en suites but focus on being in touch with
nature instead. A spot of garden has been long recognised for improving general quality of life and well being, and
now inner city dwellers want in on the action previously reserved for sprawling suburban gardens and stately mansions.
A building that can offer internal gardens and access to a nearby park is already a winner in the eyes of buyers.
Many older buildings are approaching this issue creatively via innovative design: investing in communal green roofs and
vertical gardens. Such solutions are of a win-win variety, both adding to the value of a property by as much as 15 per
cent and meeting the buyers’ needs for a relaxing environment at the same time.
Bringing the garden indoors while integrating architecture and landscaping is part of a larger trend which has already
caught on overseas and now is spreading across Australian cities.
Property Council welcomes Perth transport plan
July 15, 2011
The Property Council of Australia welcomes the release by the WA
Government of the much anticipated public transport strategy for Perth.
Public Transport for Perth in 2031 is a necessary component of Perth’s
urban growth plan, said Mr Lino Iacomella, Deputy Executive Director of the
Property Council of Australia.
“The quality of public transport amenity is one of the most important
considerations for homebuyers in new estates and prospective tenants in
commercial properties. “The good things about this plan are that there are
timelines on delivering the plan and the plan is integrated with Perth’s
important activity centre development framework.
“However the plan has not answered how the funding mechanism will operate, it only mentions options. “Public
transport investment is nation building and there should be a national strategy for funding and operating costs. “The
old system of loading the cost on adjacent developments does not work because it leads to higher costs for housing
and commercial property, which leads to affordability problems. This is the experience of other States. “The Property
Council looks forward to discussions with the Government and relevant agencies about sustainable and equitable
funding mechanisms for Perth’s public transport plan”, said Mr Iacomella.
Buying a home more important than children
July 13, 2011
The Australian dream has generally been known as the ability to buy a house with a yard big enough for the
kids to play in. That dream still exists, but it seems the yard is no longer a huge priority – because kids aren’t
high on the agenda.
Results from a survey, conducted by RAMS Home Loans, reveal buying a home is now regarded as a higher priority
than having children. Around 62 per cent of respondents aged from 25 to 45 consider purchasing their own pad their
most important achievement, while just 31 per cent of respondents say having children is their number one wish. The
remaining seven per cent were unsure.
RAMS chief executive ofﬁcer Melos Sulicich says the data indicates owning a home has signiﬁcant social
implications."We see a sense of urgency in many people when it comes to getting into the market, with Australians
delaying other major personal life decisions, such as weddings and children, to become property owners," Sulicich
Owning a home is also inﬂuencing how much couples are prepared to pay for their wedding. In other words, the lower
the cost of the wedding, the more they can put towards owning a home. "Not so long ago debt was once considered
a social stigma, but these days it's regarded as a fact of life that holds major inﬂuence in the decision making of
Australians," she says.
Level 6 ST KILDA
431-439 King William Street Level 3, 613 St Kilda Road
Adelaide SA 5000 Melbourne VIC 3004
T 08 8110 9888 T 03 9529 3988
F 08 8110 9889 F 03 9529 4688
Level 15, 48 Emily Place 3/186 Hampden Road
Auckland City, NZ Nedlands WA 6009
T +64 9 309 0187 T 08 6399 6688
F +64 9 309 0188 F 08 6399 6699
Suite 7, Ground Floor BURWOOD
12 Browning Street Suite 503, 74-76 Burwood Road
West End QLD 4101 Burwood NSW 2134
T 07 3166 0888 T 02 9745 6881
F 07 3166 0800 F 02 9745 1681
BOX HILL ST LEONARDS
Level 2, 1 Atchison Street
2 Ellingworth Parade
Box Hill VIC 3128 St Leonards NSW 2065
T 02 8668 8399
T 03 9899 7166
F 03 9899 7288 F 02 8668 8300
Level 2, 1 Atchison Street, St Leonards NSW 2065
T 02 9439 6068 F 02 9439 6048 firstname.lastname@example.org
The information contained in this document has been collected by Ironfish from various public and private sources, sources which
may include property developers, builders and other industry participants. Neither Ironfish nor any representative of Ironfish gives
any warranty as to the accuracy of the information contained in this document and expressly disclaims any liability for loss or
damage which may arise from any person acting or deciding not to act on the basis of any of the information contained in this
document. This document is intended to provide Ironfish clients with some general information only and does not constitute an
offer, contract or inducement to buy. Clients are expressly recommended to do their own due diligence in relation to any ultimate
property investment decision they make.