My Real Estate Mate

<html><body>
Climbing the property ladder – it is a term used to depict a consumer’s ability to enter the market on the first rung of affordability, climb the ladder over time through capital growth and finish at the top of the ladder in the ultimate luxurious and expensive property.

Property is a long term game, slow and steady wins the race however with regards to the current economic climate, the property ladder for the majority of first home buyers is akin to climbing Mount Everest.

Melbourne’s median apartment price for the June 2015 quarter was $443,549; for a first home buyer this equates to having saved a 10% deposit of $44,354.90 or $34,354.90 when taking into consideration the First Home Owner Grant (FHOG) of $10,000.

The FHOG scheme was introduced on the 1st of July 2000 to offset the effect of GST on home ownership. It is a national scheme funded by the states and territories and administered under their own legislation. A purchaser must live in the property for 12 months continuously within 12 months of settlement.

Capital growth within Melbourne property markets has meant that even with the assistance of the FHOG, purchasers are having to manage not only their budgets but their product and location expectations. The ability to stay in the family home in order to accumulate a 10% deposit is proving a race against time, the speed at which parents are downsizing is outpacing the rate at which their children can save.

So what and where does $443,549 buy you right now in Melbourne?

It varies considerably: from a 2 bedroom 1 bathroom and car park in Footscray, a 2 bedroom 2 bathroom and car park in Maribyrnong, a 1 bedroom 1 bathroom and car park in Collingwood, 1 bedroom 1 bathroom and stacker in Windsor, 1 bedroom 1 bathroom with no car space in South Yarra, 2 bed 1 bathroom and car park in Cheltenham to a 2 bed 2 bathroom and car park in Bundoora.

With the exception of Footscray, the location or rather the distance to Melbourne’s CBD has a direct impact on affordability.

Looking a little deeper into the demographics, we at My Real Estate Mate are seeing 90% of all first home owner demand coming from younger females in the 25-35 age bracket with budgets of $420,000 to $500,000. By way of comparison, the enquiry from males is a slightly older demographic between the ages of 32 and 40 with nominated budgets are lower in the $380,000 to $450,000 range.

The top five first home buyer enquiry suburbs, year-to-date 2015:

<ol>
<li>Albert Park</li>
	<li>St Kilda</li>
	<li>Hawthorn</li>
	<li>South Yarra</li>
	<li>South Melbourne</li>
</ol>
Location desire versus budget reality: the common demand theme is Bayside and inner East/South East. It is conceivable that managing enquiry expectations from a $443,549 property in Albert Park to a more affordable price point in say Cheltenham, comes down to accepting that the suburb a first home buyer can afford to purchase in - without having a negative impact on day-to-day lifestyle - is located two to four suburbs from their desired location.

Climbing the property ladder in Melbourne is achievable and to climb the first rung is to alter your location expectations. Melbourne is the world’s most liveable city in the luckiest country in the world, time will tell for how much longer we remain affordable.

Cameron Clarke is principal and founder of My Real Estate Mate and the <a href="https://www.urban.com.au/my-real-estate-mate?utm_source=FHB_editorial&amp;utm_medium=link&amp;utm_campaign=AR_UM_register">Apartment Register</a> brand.

Lead image credit: <a href="https://en.wikipedia.org/wiki/Albert_Park_and_Lake">Wikipedia</a>
</body></html>

cameron

First home buyers and the property ladder

<html><body>
’The next property hot spot!’ is a real estate catchcry used to unveil a suburb in which there is a window of opportunity to purchase property prior to that suburb experiencing a rise in capital value.

So where exactly is the next suburb ‘hot spot’ going to be? Do hot spots really exist and if they do what are the driving forces behind a particular suburb's growth in popularity?

More often than not a hot spot is where an influx of population occurs as a result of new and established infrastructure, amenity, education and therefore opportunity. Education is Victoria’s number 1 export and a fine example of an historical hot spot are the suburbs surrounding Melbourne University, namely Carlton and Fitzroy. No longer hot spots, they are now classified as blue chip suburbs as they have experienced capital growth, have strong rental demand and are tightly held.

So I want to purchase in Carlton but can’t due to supply or budget, so where to next? The adjoining suburbs of North Melbourne, West Melbourne and north to Brunswick; these suburbs are a natural progression from Carlton where development sites have been exhausted and developers are moving toward the aforementioned suburbs to acquire development sites where supply can be delivered to market.

Staying on the education theme, suburbs surrounding Monash University Campuses such as Caulfield and Clayton are hot spots as they are generally established housing areas and going through a transition towards medium density dwelling development.

Now to the age-old north versus south of the river: Richmond versus South Yarra. Never the twain shall meet, the battle used to be on like Donkey Kong. Now the heavyweight suburbs are Abbotsford and Windsor not only as the extension of demand from Richmond to Abbotsford and South Yarra to Windsor but for everything in between – prospective purchasers now consider all four suburbs as part of their selection criteria.

Established residential suburbs can also be classified as hot spots. To coin a phrase ‘property swap’ suburb corridors of Bundoora + Heidelberg and Preston + Coburg are hot spots. ‘Property swap’ is a scenario where parents are contemplating downsizing in the future as their children desire to enter the property market, however due to affordability of the established property market in that particular suburb, only an apartment seems affordable.

The collective family housing strategy then becomes an apartment being bought in close proximity to the family home, the children move into the apartment and at the point where the parents wish to begin downsizing and the children wish to expand their families, they swap properties.

Looking elsewhere and the west is rising, but where exactly are the suburb's market demand origins? This term is used flippantly however in this circumstance the hipster or cultural creative is one - a community of people embracing rejuvenation of the urban environment - have moved from Collingwood to Brunswick and Northcote and they now seek Footscray's affordability.

Hipster and cultural creatives are adaptable, analytical &amp; intelligent placing them at the forefront of the curve, included is this scenario is that Footscray is 6kms from the Melbourne CBD, has 2 Victorian University campuses and 3 train stations which frankly makes it a no brainer.

Skipping back over the river and demand for the Albert Park - St Kilda - Brighton corridor is continually steady for the fact that the remaining apartment development sites are few and far between. Demand flow moves as follows for first home buyer and first time investor based on affordability to suburbs such as Cheltenham. Second time owner occupier and investor property purchasers look closer to Melbourne’s CBD: to South Melbourne and the extension thereof into Australia’s largest urban renewal area Fishermans Bend.

We have not even touched upon South Morang, Frankston or Dandenong as prospective outer suburban hot spots. Ultimately though a prospective buyer's needs and desires are factors but what buyers really desire is affordability close to existing or new infrastructure and amenity. A ‘Property Swap’ is one thing, generations of renters is another.

Cameron Clarke is the principal and founder of My Real Estate Mate and <a href="https://www.urban.com.au/my-real-estate-mate?utm_source=AR_hotspot_editorial&amp;utm_medium=link&amp;utm_campaign=AR_UM_register">Apartment Register</a>.
</body></html>

Property Hotspots: Fashion or Affordability?

<html><body>
Question: Where is the source of Victorian apartment demand?

Answer: Local Victorian owner occupiers and increasingly investment demand is coming from New South Wales driven by value proposition and offshore buyers with permanent residency as well as expats are taking advantage of the recent exchange rate variance.

The South-East Corridor with suburbs close to school zones and train stations such as Caulfield, Bentleigh and Glen Huntly continue to compete with inner northern suburbs of Collingwood, Brunswick and North Melbourne. In these locations investors and first home buyers have been looking for 1 bedroom apartments with a minimum 48 sqm size in the $450K-$500K price bracket and couples in the $540K-$620K range with a preference for 66-70 sqm product.

Price point orientated purchasers are setting their sights on inner-city suburbs; defined as within 6kms to the CBD - interestingly potential purchasers are amenable with either the Northern or Southern side of the CBD, previously a North/South 'Side of the River' option would not have been considered.

North Melbourne and West Melbourne will go hand in hand with several development sites transacted on and off market in June and July of this year. The depth of market for Brunswick East &amp; West versus Brunswick proper will be tested with several launches coming late 3rd quarter.

Recent off-market boutique project launches in Elsternwick and Bentleigh have been embraced by the local owner occupier market and upcoming Windsor apex projects are enticing buyers looking at South Yarra and St Kilda.

Couples and young families are embracing vertical integrated communities with proximity to the CBD in South Melbourne and adjoining Fishermans Bend due to the ever increasing realisation of commute times constraining lifestyle choices. We have seen product demand for 2-3 bedroom, 2 bathroom, 1 car park with nominated budgets ranging from $650,000 to $1 million.

We forsee the lack of new product in Port Melbourne and the strength of demand for South Melbourne and St Kilda as driving interest in Fishermans Bend on top of being the Southbank development extension; the precinct will have the same impact on the market recently experienced in Fortitude Valley, Qld.

Downsizer demand can be characterised by looking at 'promenade' streets including St Kilda Road, Queens Road, Fitzroy Street and projects with view lines opposite parks in the Eastern suburbs of Kew, Hawthorn and South Yarra. The general product size is for 2 bedroom + study/optional 3rd bedroom, 2 bathrooms and 1 car in price bands of $800K - $900K, $1.1 - $1.2 million and $1.5 - $1.8 million.

Interesting that the downsizer market request 1 car park, many couples placing preference on proximity of infrastructure and amenity to not require a second car. Projects just launched and coming to market in Spring will number 6, the success of projects such as Arthur have set the benchmark in this product and location segment.

Value orientated hot spots such as Cairnlea where the ball park price point of a 1 bedroom is $270K-$310K and 2 bedroom from $350K-$380K along with renewed enthusiasm for projects in Footscray where recent Joseph Road Precinct launches are having strong market absorption.

Traditional established housing suburbs such as Bundoora are appealing to local residents where parents may look to downsize and their children are starting a family - we see the scenario of property swaps being a common theme in areas such as this.

Cameron Clarke is the Principal and Founder of My Real Estate Mate (MREM). <a href="https://www.urban.com.au/my-real-estate-mate?utm_source=state_of_market_aug_editorial&amp;utm_medium=banner&amp;utm_campaign=AR_UM_register">Apartment Register</a> is an-house brand of MREM and an Urban.com.au joint-venture organisation.

Lead image/render credit: Laurence Dragomir
</body></html>

State of the market in Victoria: apartment demand and supply

<html><body>
Do you have a 10% cash deposit? 90% have, 10% have not.

Apartment Register has received and qualified 238 first home buyer (FHB) enquiries to date in 2015, so where or who pays for the deposit and what is the length of time taken to save for the deposit?

First home buyers understand time is of essence to enter the market and it is a good time to do so. Interest rates are low, apartment supply is reasonable, product choice and quality continues to improve. The timing might be right but the deciding factor is the ability to save or already have at hand 10% cash; that is a $45,000 deposit on a $450,000 off the plan apartment.

<figure><a class="colorbox colorbox-insert-image" href="https://res.cloudinary.com/dz9xllyip/image/fetch/q_auto:good/https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/pictures/article-images/deposit_source.png" rel="gallery-all" title="Source: The Real Estate Institute of Australia November 2014"><img alt="" class="image-article-full-width-580px" height="365" src="/sites/urban.melbourne/files/styles/article_full_width_580px/public/pictures/article-images/deposit_source.png?itok=tugPGwfH" title="Source: The Real Estate Institute of Australia November 2014" width="580"></a>

<figcaption>Source: The Real Estate Institute of Australia November 2014</figcaption></figure>The typical Australian income after tax is $43,100 for a single person. Of the first home buyer enquiries who nominate as single, 70% are female aged between 25-35 and 30% male aged between 28 and 40. With an ideal budget price range of between $400,000 to $450,000. 50% of the first home buyers currently reside at their parent’s residence and have deposit assistance from their parents, with the remaining currently renting with their partner or a friend and have saved the deposit without family assistance.

When asked the average time frame to save the current amount the typical response is 5-6 years. Are we living above our means? Our embrace of lifestyle living is a choice and an expensive one at that.

Australian household credit card debt is growing at 5% per annum. Lifestyle is a direct result of location, access to and ease of use of local suburb amenity and facilities. However living the lifestyle comes at a cost, the realty is you are out more, spending more.

Property ownership is both a privilege and a responsibility, and a move that which requires long term planning. Factoring into account the typical 5-6 year timeframe required to save a necessary deposit, prospective first home buyers should consider the ramifications of not entering the market when they possess the means to do so. To enter two, three, six years down the track will most likely result in the FHB's holding comparatively higher product expectations with an associated product cost increase.

The adage of getting you foot in the door rings true in the Melbourne property market.

<figure><a class="colorbox colorbox-insert-image" href="https://res.cloudinary.com/dz9xllyip/image/fetch/q_auto:good/https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/pictures/article-images/first-appartment-essential-tech-gadgets.jpg" rel="gallery-all" title="Image courtesy apartmentagent.co.nz"><img alt="" class="image-article-full-width-580px" height="326" src="/sites/urban.melbourne/files/styles/article_full_width_580px/public/pictures/article-images/first-appartment-essential-tech-gadgets.jpg?itok=RjNEzWog" title="Image courtesy apartmentagent.co.nz" width="580"></a>

<figcaption>Image courtesy apartmentagent.co.nz</figcaption></figure>How do you educate the FHB market on the importance of purchasing property? My Real Estate Mate recently published the process of <a href="https://www.urban.com.au/new-apartments">how to buy an off the plan apartment</a> in response from our clients wanting to understand the intricacies of the off the plan buying process. However, clarifying the process to purchase and actually having the ability to purchase are two very different things.

Property development is the management of time, specifically the cost of time; time effects supply which is the main driver of affordability. The national debate on housing affordability requires more than a knee jerk suggestion of early access to and use of Self Managed Superannuation Funds (SMSF) for FHB’s. The time taken to set up a SMSF, the cost, regulations and audit requirements are prohibitive for many, FHB’s included.

Generation Rent is a term commonly used in Europe, it depicts the economic snap shot of relative level of wages, the cost of living and supply of affordable housing product. Credit card debt will continue to grow, the reliance or presumed inter-generation transfer of wealth will be slower and reduced as we are living longer and the cost of aged care escalates. Generation Rent is on Australia’s door step.
</body></html>

Mo'Money Mo'Money - Where is the money coming from?

<html><body>
2015 has kicked off with an abundance of off the plan apartment enquiry on <a href="https://www.urban.com.au/my-real-estate-mate?utm_source=um_editorial&amp;utm_medium=link&amp;utm_campaign=AR_UM_register">Apartment Register</a>, across Melbourne’s inner city suburbs. Following our article on <a href="https://www.urban.com.au/news/my-real-estate-mate-overseas-buyers-and-the-allure-of-australia">overseas buyer demand drivers</a>, we thought it best to comment on the local market enquiry year to date.

Apartment Register’s 400 enquiry sample has been 90% local owner-occupier, comprised of first home buyer (FHB) and first time off the plan buyers; the remaining 10% is local and overseas investors who typically own more than one property.

The common theme is the preference to purchase in the inner ring suburbs considered to be within 10km of Melbourne CBD: close to their place of work, friendships groups and public transport. For the most part, the buying experience is overwhelming, navigating through pricing, floor plans and marketing material with the average purchaser enquiring between five and fifteen projects over a three to six month search timeline.

The trend for owner-occupier enquiry is the desire to live in what they phrase as a ‘boutique development’, considered to be that of less than 80 apartments with the ideal preferred number at 50 apartments. Owner-occupiers prefer lower annual body corporate fees, as they have existing recreation memberships and wish to settle within a 6 to 18 month settlement time line from date of enquiry, with an 18 month settlement period the maximum amount of time prepared to wait, prior to moving in.

Single first home buyer enquiry is 70% female (age bracket of 25-35) and 30% male (age bracket of 28-40) with a budget of $400-$450K for a 1 bedroom, 1 bathroom with car park (preferred over car stacking systems) at a minimum size of 45 sqm. 50% of the first home buyers currently reside at their parent’s residence and have assistance from the parents, with the remaining currently renting with a partner or friend and have saved the 10% deposit without family assistance.

First home buyer couples in the 28-34 age bracket have a product preference for 2 bedroom, 1.5 bathroom with car park configuration in the $500-$700K price bracket. Selection criteria includes natural light to bedrooms, ample ventilation and security system.

First time local investors selection criteria is for 2 bedroom, 2 bathroom and car park due to rental yield and flexibility to rent to a couple or friends. The proximity to transport and the number of the apartments within the developments mimics that if they were buying to live in.

The enquiry for over 55 year old downsizers is a healthy demand for 2 bedroom and study, 2 bathroom and car park at a minimum size of 80 sqm, with a budget of $700K to $900K. The attraction is the cost of apartment entry, comparable to a townhouse product with lower entry cost and lack of stairs. Half of the enquiry of over 55 year olds still have a child living on premise, which does not deter their timing to sell the family home and downsize within the next 12-24 months.

At a suburb level, the trend in our enquiry data indicates buyers look for suburb corridors and are prepared to choose between three to four suburbs within that corridor area. For example, first preference for many is Fitzroy and Carlton, which depending on available products, clients are prepared to extend their criteria to North Melbourne or Collingwood.

On a suburb level, South Melbourne is the number one requested suburb - with Fishermans Bend gathering momentum with potential buyers - communicating that a complete suburb is not required for venturing beyond for schools, amenities and other services.

First time overseas investors prefer the Melbourne CBD as an investment, or for potential future use by the family when studying in Melbourne for tertiary education. Experienced overseas investors prefer the North Melbourne and Carlton precinct for proximity to Melbourne University and the Southbank precinct apartments for the Crown Entertainment Complex, along with access to the Botanical Gardens and Arts Precinct. Our enquiry indicates the even trend for 1 bed/1 bathroom products up to $500K and 2 bed/2 bathroom products up to $650K.

My Real Estate Mate through the <a href="https://www.urban.com.au/my-real-estate-mate?utm_source=um_editorial&amp;utm_medium=link&amp;utm_campaign=AR_UM_register">Apartment Register</a> platform will regularly comment on enquiry demand trends. Developers can contact us at any time for feedback on product design and general apartment demand. We hope you have found this snapshot helpful and look forward to hearing from you.
</body></html>

Buyer sentiment: What the market is telling us

<html><body>
“Fresh air and fresh produce” was the response from the managing director of a major Mainland Chinese company who enquired on Apartment Register this week when I asked him “what was the main driving motivational factor to apply for and gain residency in Australia over Canada or USA?”. Can it be that simple? Yes, it can.

Overseas purchasers of property in Australia is not a recent phenomenon. We are the country of choice for many, the origination of overseas buyers in Australian cities has historically been one of proximity. South Africans in Perth to New Zealanders in Brisbane, people like to buy where they like to holiday, where they feel safe and secure and yes, where the air and produce is fresh.

<figure><a class="colorbox colorbox-insert-image" href="https://res.cloudinary.com/dz9xllyip/image/fetch/q_auto:good/https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/pictures/article-images/migration-to-australia.jpg" rel="gallery-all" title="Current migration trends. Image courtesy skilledmigration.govspace.gov.au"><img alt="" class="image-article-full-width-580px" height="290" src="/sites/urban.melbourne/files/styles/article_full_width_580px/public/pictures/article-images/migration-to-australia.jpg?itok=ME5vkhGd" title="Current migration trends. Image courtesy skilledmigration.govspace.gov.au" width="580"></a>

<figcaption>Current migration trends. Image courtesy skilledmigration.govspace.gov.au</figcaption></figure>Apartment Register’s international enquiry database indicates that the top four motivations of overseas buyers to Australia are:

<ul>
<li>Investment</li>
	<li>Education</li>
	<li>Lifestyle</li>
	<li>Emigration</li>
</ul>
The purchase of residential real estate by foreign investors is regulated by the Foreign Investment Review Board (FIRB). Overseas investors are allowed to purchase off the plan residential property provided they have applied for and been granted FIRB approval.

Chinese households typically have strong balance sheets and are lowly leveraged, a typical household holds as much as a quarter of their assets in cash deposits versus Australia’s annual household credit card growth rate of on average 5% per annum. Chinese authorities have sought to control the rise of property prices by restricting the purchases of second and third homes with higher minimum deposits and capital gains tax leaving the economic option to build family wealth through property an offshore rather than local strategy.

The off the plan deposit rate of 10% of the total purchase price is an attractive proposition combined with stamp duty savings and depreciation.

Education is Victoria’s largest export. In 2014 the total number of tertiary students in Victoria was 344,658 of which 231,714 were local and 112,944 international. The exchange rate and interest rate are considerations for international purchasers, both at time of writing are conducive for parents of current and future international students to purchase for their children while studying and also for family holiday accommodation.

<figure><a class="colorbox colorbox-insert-image" href="https://res.cloudinary.com/dz9xllyip/image/fetch/q_auto:good/https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/pictures/article-images/melbourne-on-the-yarra.jpg" rel="gallery-all" title="Melbourne from the Yarra. Image courtesy Back of Chapel"><img alt="" class="image-article-full-width-580px" height="387" src="/sites/urban.melbourne/files/styles/article_full_width_580px/public/pictures/article-images/melbourne-on-the-yarra.jpg?itok=0Ypnzm0U" title="Melbourne from the Yarra. Image courtesy Back of Chapel" width="580"></a>

<figcaption>Melbourne from the Yarra. Image courtesy Back of Chapel</figcaption></figure>Lifestyle and quality of life is paramount, fresh air and fresh produce sounds common place but for many this is an unattainable and unaffordable luxury in their home towns. Australia’s gun laws are perceived by overseas buyers as being enforced and stricter than those in Canada or America, the two other countries often being considered for property investment.

Long term strategic family plans often referred to by our clients as their ‘100 year plan’ result in decisions being made not only for themselves and their children but for their grand children. Commercial property like residential property is gaining popularity amongst overseas buyers with 32% of the Australian office property purchases in the 12 months to December 2014 bought by foreign investors.

‘The Lucky Country’ is often used as a through away line and in the context of Australia’s wide open space, prosperity and weather, so yes, it really is as simple as fresh produce and fresh air.

Lead image courtesy UWS.
</body></html>

My Real Estate Mate: Overseas buyers and the allure of Australia

<html><body>
As crazy as it sounds, settling a new off the plan apartment requires you to be even more organised then when you purchased. It is an exciting time and you are well on your way to reap the advantages of apartment ownership, such as:

<ul>
<li>Freedom and flexibility.</li>
	<li>Predictability and stability.</li>
	<li>Accumulating capital and equity.</li>
</ul>
A quick recap: you have picked your apartment out with Apartment Register, signed the contract of sale and paid your 10% deposit, and the construction of the development has commenced. Now what do I do? Depending on the size of the building, construction will take on average 18 months to two years before you can settle and move in or rent the apartment.

Over the course of the construction of your off the plan apartment, My Real Estate Mate will update you with photos and construction commentary from the builder and developer. It is a fascinating and rewarding time to watch one of your lifetime's largest purchases be built from the ground up.

The settlement process involves every person you interacted with when purchasing the apartment, to ensure the process runs smoothly. The following tasks are required to be completed:

<ol>
<li>Final inspection.</li>
	<li>Certificate of Occupancy.</li>
	<li>Settlement time and date confirmation.</li>
	<li>Valuation report.</li>
	<li>Statement of Adjustments.</li>
	<li>Transfer of funds.</li>
	<li>Registration of the title / transfer of land.</li>
	<li>Handover packet.</li>
</ol>
The handover packet will include your keys, appliance guarantees and other information, such as the appointed body corporate manager. The body corporate will require a number of apartment owners within the development to be on the committee which manages operational matters of the development. The body corporate manager will hold an annual general meeting, which you can attend to be kept up to date with items such as building maintenance.

Effective the day of settlement, Apartment Register recommends connecting all apartment services such as electricity and water and commencing insurances. You don’t want to move in in the dark! As a new owner, you will need to book the time and date to move in. This is to ensure a lift is allocated to ensure smooth, stress free day. Depending on the development move in schedule, you may only be allowed to move in on a weekday.

If you are an investor, you will need to appoint a rental agent. Apartment Register recommends interviewing local agents as they know the area and may have potential tenants ready to move in. You will need to sign a rental agreement with the agent, along with placing an advertisement on various real estate websites.

The rental agent will then hold open days throughout the week to gain interest and take apartment application forms from prospective tenants, who will have to provide information on their current employment status, referees and rental history. You as the vendor choose your tenant from the application pool and then enter into a tenancy agreement.

Your rental agent will provide you with regular apartment inspection reports to ensure the tenant is looking after the apartment, along with monthly or fortnightly financial statements.

My Real Estate Mate hopes you found our summer reading series useful and remember to be nice to your neighbour! Our previous articles in this series:

<ul>
<li><a href="https://www.urban.com.au/news/my-real-estate-mate-summer-reading-series-purchasing-off-the-plan-apartments">Purchasing off the plan apartments</a></li>
	<li><a href="https://www.urban.com.au/guides">Buying off the plan: the first move</a></li>
	<li><a href="https://www.urban.com.au/guides">Buying off the plan: the nitty gritty</a></li>
</ul>
Apartment Register is a value added service offering our clients first pick of apartments in new off the plan developments prior to public launch. <a href="https://www.urban.com.au/my-real-estate-mate?utm_source=um_editorial&amp;utm_medium=link&amp;utm_campaign=AR_UM_register">Register here</a> and we will be in contact with you straight away.

Cameron Clarke is licensed real estate agent and managing director of My Real Estate Mate and <a href="https://www.urban.com.au/my-real-estate-mate?utm_source=um_editorial&amp;utm_medium=link&amp;utm_campaign=AR_UM_register">Apartment Register</a>; a joint venture partner of Alamar AV Communications Pty Ltd, publisher of Urban.com.au. Each Saturday over summer Cameron will provide provide commentary and tips on all things apartments.

Cameron's published commentary is not designed to be taken as financial advice and should you wish to register with Apartment Register, Urban.com.au strongly recommends registrants consider their financial position and do their own research before entering into contracts for sale.
</body></html>

My Real Estate Mate summer reading series: Buying off the plan - the finished product

<html><body>
Calculator ready! In our third instalment of Apartment Register’s Summer Reading Series we will identify key investor considerations.

You will often hear the term ‘vacancy rate’ which is a calculation based on tenanted dwelling within an area and is used as a tool to determine rental demand. A 3% vacancy rate is the point at which a market is set to be evenly balance between landlords and renters, that is equilibrium.

Calculating an off the plan property rental yield by taking your property's purchase price, and the yearly rent (weekly rent times by 52). Divide the yearly rent by the purchase price and times the result by 100 to get yourself a percentage. This percentage is your gross rental yield. For example:

<ul>
<li>Purchase Price: $500,000</li>
	<li>Weekly Rent: $465</li>
	<li>Annual Rental Income: $24,180</li>
	<li>Calculation: $24,180 / $500,000 * 100</li>
	<li>Gross Rental Yield = 4.83%</li>
</ul>
In order to calculate the net rental return, you will need to subtract other associated expenses such as the annual body corporate fee.

The body corporate is an annual fee for the maintenance and insurance of all public areas of the building. This may be cleaning the public areas to maintaining the lifts and if the building has a swimming pool or gym, the cost to clean and manage these services.

New off the plan apartment developers will typically provide you with marketing collateral outlining the position and proximity to amenity, as well as independent research information including demographic and infrastructure data and analysis, that presents all the facts and figures to ensure a purchaser can make an informed decision.

Included in the information packet is a deprecation schedule. Inclusions in new off the plan apartments are able to be depreciated; indicative depreciation schedules are supplied by developers at the point of sale and a company such as BMT Quantity Surveyors can provide a depreciation schedule specifically for your apartment.

The Victorian Government offers a stamp duty concession when you purchase property off the plan. Effectively as a purchaser you pay duty on the improved value of the land, that is, the completed construction value including GST as at the contract date. As you are buying off the plan, in most cases construction will not yet have started at the date of contract, therefore the percentage saved by purchasing off the plan versus purchasing the same completed apartment is significant.

Inclusions, also referred to as fixtures and fittings, includes items such as the brand of kitchen oven to the type of benchtop, be it stone or stainless steel. There is no wrong or right appliance type or brand within an apartment, it will have been chosen by the interior decorator and architect to best reflect the apartment building brand and positioning.

When Purchasing a new off the plan apartment you will have to choose an internal colour preference - usually from two colour palates - and this will invriably come down to a choice of a light theme and a dark theme. The colour variations will often include the colour of the carpet or floorboards, kitchen bench and splash back to the bathroom wall tiling.

Ceiling heights will vary from some rooms: this is due to the air conditioning type, ventilation from kitchen and bathroom, all those pipes need to fit somewhere so it is just something to be aware of and is perfectly normal to see a variance in ceiling heights listed.

My Real Estate Mate always recommend you review the Contract of Sale and instruct your solicitor to do so also. Items we recommend to check include the inclusion list, and that the floor plan of the marketing material is the same as in the contract of sale. Also check the nomination clause, as you might purchase the apartment in your own name and when you settle may want to allocate the asset to your superannuation fund. You will need to sign three copies of the contract of sale: a copy will be for your record, the developer and solicitor. Make sure you keep it in a safe place for your records, your bank will also request a copy for settlement.

If you are an investor and searching for healthy rental yield and capital growth off the plan apartment opportunities, feel free to contact My Real Estate Mate through <a href="https://www.urban.com.au/my-real-estate-mate?utm_source=um_editorial&amp;utm_medium=link&amp;utm_campaign=AR_UM_register">Apartment Register</a> on Urban.com.au and we will be in contact with you straight away.

Cameron Clarke is licensed real estate agent and managing director of My Real Estate Mate and <a href="https://www.urban.com.au/my-real-estate-mate?utm_source=um_editorial&amp;utm_medium=link&amp;utm_campaign=AR_UM_register">Apartment Register</a>; a joint venture partner of Alamar AV Communications Pty Ltd, publisher of Urban.com.au. Each Saturday over summer Cameron will provide provide commentary and tips on all things apartments.

Cameron's published commentary is not designed to be taken as financial advice and should you wish to register with Apartment Register, Urban.com.au strongly recommends registrants consider their financial position and do their own research before entering into contracts for sale.

Lead image courtesy Pixabay.
</body></html>

My Real Estate Mate summer reading series: Buying off the plan: the nitty gritty

<html><body>
Time is of essence! Have you ever enquired for an apartment project on the Internet, only to discover by the time you speak to the real estate agent - or visit the display suite - the project is almost sold out?

Apartment Register ensures our client’s receive first priority pick in new off the plan developments prior to public launch. Having said that, you need to be organised with a clearly defined apartment selection criteria and understanding of your financial capacity, so you will be able to ascertain a development's suitability to make an informed purchase decision.

When searching, many purchasers search for a property first, find an apartment they would like to buy and then go to the bank, only to find out the price is out of their budget. Your bank will be able to give an indication - based on the amount of money saved and your income - of the price point you can realistically afford. Keep in mind your health, lifestyle and spending patterns.

To purchase an off the plan apartment, you are required to pay a 10% cash deposit and sign a contract of sale. The remaining 90% of the purchase price is paid at settlement; that is, on completion of construction and certificate of occupancy.

If you are looking at buying a $450,000 apartment, you would need to have $45,000 (for the 10% deposit) and pay the remaining 90% or $405,000 at settlement, which is typically 18 months to two years from commencing construction.

Once you have a budget, you can determine your apartment selection criteria. Everyone’s position is different, it is normal to turn to family and friends for advice; however if they don’t own a property they may not be aware of all that is involved in purchasing a new off the plan apartment, nor they are in your current lifestyle and income bracket or have the amount of savings you do.

Remember, it will be one of your largest lifetime decisions, it needs to work for you, not your friends and family.

Your suburb location and size of the apartment is the main price point driver. Keep in mind your first choice suburb to live in may not be in your budget, however the surrounding area suburbs can be a good alternative.

"Location Leap Frog" is the term we use for wanting to live in a location that is tightly held; the zoning or council restrictions may limit building apartments due to height constraints, and therefore may not allow for apartment development which offers limited opportunity to buy in these areas.

At Apartment Register, we have many enquiries for new off the plan apartments in Albert Park and Middle Park, both of which are very tightly held and low-rise suburbs, so you would need to Leap Frog to suburbs within the area, such as South Melbourne or Fishermans Bend.

Do you require a 1, 2 or 3 bedroom apartment? Internal sizes of apartments vary and are calculated per square metre (per sqm) basis, the terrace or balcony is known as external space and is also measured in square metres. The price of an apartment is reflected on the total internal size.

The size guide below is general and will vary on how many bathrooms or study you require:

<ul>
<li>1 bedroom = 42sqm to 50sqm</li>
	<li>2 bedroom = 56sqm to 72sqm</li>
	<li>3 bedroom = 75sqm to 100sqm+</li>
</ul>
In keeping with the mathematics theme, <a href="https://www.urban.com.au/guides">our next article</a> in the Apartment Register summer reading series will touch on rental yield and depreciation.

Feel free to contact My Real Estate Mate through <a href="https://www.urban.com.au/my-real-estate-mate?utm_source=um_editorial&amp;utm_medium=link&amp;utm_campaign=AR_UM_register">Apartment Register</a> on Urban.com.au and we will be in contact with you straight away.

Cameron Clarke is licensed real estate agent and managing director of My Real Estate Mate and <a href="https://www.urban.com.au/my-real-estate-mate?utm_source=um_editorial&amp;utm_medium=link&amp;utm_campaign=AR_UM_register">Apartment Register</a>; a joint venture partner of Alamar AV Communications Pty Ltd, publisher of Urban.com.au. Each Saturday over summer Cameron will provide provide commentary and tips on all things apartments.

Cameron's published commentary is not designed to be taken as financial advice and should you wish to register with Apartment Register, Urban.com.au strongly recommends registrants consider their financial position and do their own research before entering into contracts for sale.
</body></html>

My Real Estate Mate summer reading series: Buying off the plan - the first move

<html><body>
<a href="https://www.urban.com.au/new-apartments">New off the plan apartments</a> are increasingly becoming the first choice for <a href="https://www.urban.com.au/guides/how-to-buy-a-house-in-2019-a-guide-for-first-time-home-buyers">first home buyers</a>, owner occupier and <a href="https://www.urban.com.au/guides/how-to-invest-in-property-in-2020-the-ultimate-guide-">investors</a>. Buying off the plan property is very different to established property offering apartments to purchasers prior to construction commencing.

Since launching the <a href="https://www.urban.com.au/my-real-estate-mate?utm_source=um_editorial&amp;utm_medium=link&amp;utm_campaign=AR_UM_register">Apartment Register</a> platform, My Real Estate Mate clients regularly ask us ‘how do I buy an apartment off the plan?’ So we thought it would be a good idea to guide you through the process, give you some peace of mind and save you some time and effort.

Let’s kick off with why the way we live has evolved from the family home on a quarter acre block to a higher density level of living, namely apartment developments. The explanation revolves around three key elements:

<ol>
<li>Affordability</li>
	<li>Embrace vertical living lifestyle</li>
	<li>Household dwelling numbers</li>
</ol>
<h2>Affordability</h2>

The accumulation of capital - while an advantage for those who already own a property - means the affordability of an off the plan apartment comes down to you having enough money saved to pay a 10% deposit. Increasingly an individual's earning capacity has not kept up with mortgage repayments, so you have to spend more on a property than you would have had to say 10 years ago to get a comparable product.

<h2>Embrace vertical living lifestyle</h2>

We are increasingly time poor and as such want a ‘lock and leave lifestyle’ that is, a lifestyle requiring minimal household maintenance. Why mow the lawn when you can walk to and play in the local park? Increasing work commute time means we are spending more time in traffic or on the train than doing the things we enjoy. New York City, London and Hong Kong are apartment living cities. That is, living in a house is a rarity, we are simply heading in the same direction.

<h2>Household dwelling numbers</h2>

Population dynamics are changing. The number of dwellings has had to increase to cater for the increasing number of single households. Divorce, downsizing and aged care rates all of which are increasing mean more dwellings are required to accommodate everyone.

Let’s live skyward, yes indeed now remember that everyone’s selection criteria are different. This is why we say to our Apartment Register clients that while family and friends are everyone’s first port of call for advice in actual fact everyone’s circumstances are different therefore everyone’s selection criteria are different. Keep in mind what type of buyer you are and your considerations.

<h2>First home buyer</h2>

Are you buying your first property? The First Home Owner Grant (FHOG) scheme was introduced on 1 July 2000 to offset the effect of the GST on home ownership. It is a national scheme funded by the states and territories and administered under their own legislation.

Under the scheme, a one-off grant is payable to first home owners that satisfy all eligibility criteria. The Grant amounts vary from state to state and can change, so ensure you have the most up to date amount that will assist your purchase and the criteria to ensure you are abiding by the regulations. At time of writing, the current FHOG for Victoria is $10,000 on new off the plan property up to $750,000 in value. You must live in the property for 12 months continuously within 12 months of settlement.

<h2>Owner-occupier</h2>

An emotional buying decision reflecting suburb, size and type of the product to house the family but also financial relating to purchase price and affordability. School zones are increasingly becoming a driver for owner occupiers with areas such as Balwyn: Victoria's tightly held suburb with consistent capital growth due to Balwyn High School being one of the top public schools in the state. The advantage of an apartment within that school zone is that the chances are it will be cheaper than a house.

<h2>Investor</h2>

Investors will be driven by the mathematics of the purchase being either rental yield, depreciation or capital accumulation. My Real Estate Mate reviews all new off the plan apartment calculations with our clients prior to purchase, ensuring revenue and expenses such as body corporate and insurance are analysed.

<h2>Downsizing or retirement</h2>

A lifetime of accumulation may require to have ample cupboard space for storage or be close to the lift for ease of carrying shopping bags or golf clubs! Downsizing and aged care buyers often forget how expensive it is to sell their current residence and the cost to enter a new residence. Stamp duty saving minuses this trade in/trade out cost and is one of the advantages of off the plan apartments.

<h2>International buyer (FIRB)</h2>

International purchaser: if you do not have Australian residency you will need to apply to purchase the apartment from the Foreign Investment Review Board (FIRB).

<a href="https://www.urban.com.au/guides">In our next article</a>, we address the steps in the process towards buying a new off the plan apartment with Apartment Register. If you have any questions, you can contact My Real Estate Mate through <a href="https://www.urban.com.au/my-real-estate-mate?utm_source=um_editorial&amp;utm_medium=link&amp;utm_campaign=AR_UM_register">Apartment Register</a> on Urban.com.au and we will be in contact straight away.

Cameron Clarke is licensed real estate agent and managing director of My Real Estate Mate and <a href="https://www.urban.com.au/my-real-estate-mate?utm_source=um_editorial&amp;utm_medium=link&amp;utm_campaign=AR_UM_register">Apartment Register</a>; a joint venture partner of Alamar AV Communications Pty Ltd, publisher of Urban.com.au. Each Saturday over summer Cameron will provide provide commentary and tips on all things apartments.

Cameron's published commentary is not designed to be taken as financial advice and should you wish to register with Apartment Register, Urban.com.au strongly recommends registrants consider their financial position and do their own research before entering into contracts for sale.

Lead image courtesy Yardi.
</body></html>

My Real Estate Mate

Editor's Picks

Have something to contribute?

Developments

New apartments

New townhouses

News

My Real Estate Mate

Editor's Picks

Receive the latest news stories to your inbox

Have something to contribute?

Developments

New apartments

New townhouses

News