Friday, August 18, 2017

Weekend Reads – Must read articles from the last week

There are more interesting articles, commentaries and analyst reports on the Web every week than anyone could read in a month.

Each Saturday morning I like to share some of the ones I’ve read during the week.

The weekend will be over before you know it, so enjoy some weekend reading…and please forward to your friends by clicking the social link buttons.

What now for Sydney property prices? Five economists give their predictions

The Sydney property market has made many headlines lately for it’s soaring property prices.

But what does the future hold?

This article from Domain.com.au shres the predictions of 5 economists, analyzing where the market is now, and where it may go.

After five years of soaring property prices the question on the lips of Sydney’s buyers and sellers is clear: will booming prices continue?  bondi beach sydney

Domain asked five top Australian economists to provide their forecasts for price growth in Sydney over the next 12 months.

Each of them had a unique take on the market – some expected prices to be relatively flat, others anticipated falls in the median price.

But the majority agreed on at least one point: Sydney’s double-digit growth days are over.

Most of them cited concerns about increased restrictions on investor activity, more apartment development and the market simply running out of steam.

Although there were significant differences in the forecasts, the outlook for the apartment market is clearly bleaker than the housing market, due to pockets of oversupply potentially putting downward pressure on prices.

And, depending on whose viewpoint you subscribe to, the difference in next year’s median price could be as much as $100,000.

The panel 

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  • AMP Capital chief economist Shane Oliver
  • Market Economics managing director Stephen Koukoulas
  • Compass Economics chief economist Hans Kunnen
  • BIS Shrapnel managing director Robert Mellor
  • Domain Group chief economist Andrew Wilson

Apartment outlook

  • Three expect prices to fall.
  • Two expect prices to increase.
  • Highest outlook: Growth of 5 per cent
  • Lowest outlook: Fall of 7 per cent

There was a definitive split on where apartment prices are heading in the next 12 months – with two in the panel predicting rises and three expecting falls. Sydneysuburbs 496037222

The most bearish of the lot was AMP Capital chief economist Shane Oliver, who forecasted a 7 per cent decline for the next 12 months.

Market Economics’ Stephen Koukoulas tipped a 2 per cent drop, while BIS Oxford Economics managing director Robert Mellor expected a 1 per cent decline.

If the bears have it right, by June 2018 Sydney’s current apartment median of $758,000 could drop to anywhere between $705,000 to $750,000.

Dr Oliver’s 7 per cent decline was based on unchanged interest rates for the next 12 months, but a likely increase of 25 basis points for bank mortgage rates on interest-only loans for investors. sydney

He was also expecting another round of tightening measures from the Australian Prudential Regulatory Authority, and a cooling of offshore demand.

“This, along with a surge in the supply of units, will likely result in falls in unit prices and a slowing in home price gains,” he said.

Mr Koukoulas pointed to supply-side pressure and a tightening on loans from the banks, which also led him to predict 0 per cent price growth for houses.

“Throw all these things into the melting pot and it appears as though the long-overdue cooling in Sydney and Melbourne is poised to happen,” he said.

Read the full article here

Wages bump along along the bottom

Despite talk that wage growth is picking up, it would seem there is still a long way to go.

This Blog by Pete Wargent shows the statistics behind the results.

Wages bumping along hand beg money parent grandparent kid give money help bank coin share

There’s been plenty of talk of wages growth in Australia picking up the pace again as the labour market improves.

But with plenty of underemployment and spare capacity around, there’s barely a flicker of that yet.

Wages growth came in at +0.5 per cent for the June 2017 quarter, and +1.9 per cent for the year.

Wage Price Index

For all the hand-wringing about record low wages growth and so on, it’s worth noting that wages have comfortably outpaced inflation over the past decade.

Wages growth is still ahead of underlying inflation even now, if only just.calculator coin money save debt

Not so widely reported was that public and private sector wages growth including bonuses increased by +0.7 per cent in the quarter – the strongest result for the June quarter since 2010 – to be +2.1 per cent higher over the year.

Furthermore, the numbers of hours worked in the economy has been rising solidly over the past 12 months, even if growth in the hourly rates of pay has been subdued.

Public sector wages growth has been surprisingly robust in rising by +2.39 per cent over the financial year.

Read the full article here

Melbourne named world’s most liveable city for a record seven years in a row

There’s a lot to love about Melbourne – the coffee, the culture, the people

It’s therefore no surprise that for the 7th year in a row Melborune has been names the MOST liveable city in the world.

An article in the Herald Sun takes a closer look at the reasons behind the results.

MELBOURNE has been named world’s most liveable city for a record seventh year in a row. melbourne

It’s the first time a city has held the title in its own right over that number of wins, according to the Economist Intelligence Unit’s Global Liveability Report 2017.

Melbourne scored an overall rating of 97.5 out of 100 on the liveability index this year, narrowly pipping the Austrian capital Vienna at the post.

In a repeat of last year’s result, the Canadian cities of Vancouver, Toronto and Calgary took the next positions, with Adelaide in a tie with Calgary for fifth place.

The only other Australian city in the top 10 was Perth in seventh place, while Sydney came in at 11, “reflecting growing concerns over possible terror attacks”. melbourne-1639332_1920

Melbourne scored a perfect 100 in healthcare, education and infrastructure.

It scored 95.1 for culture and environment and 95 for stability.

The scores were identical to last year’s liveability index results.

The report said that although the top five cities remain unchanged, “the past few years have seen increasing instability across the world, causing volatility in the scores of many cities”.

“In Europe, cities have been affected by the spreading perceived threat of terrorism in the region,” it said.

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“Sydney in Australia is another city that has seen a decline in its ranking, reflecting growing concerns over possible terror attacks in the past three years.”

Lord Mayor Robert Doyle hailed Melbourne’s dominance by surpassing Vancouver’s previous record of six wins on the trot in its own right.

“The world record is an amazing feat that all Melburnians should be extremely proud of today,” he said.

 Click here for the full article

Five biggest property buying fails

When purchasing a house – do you have the right strategy to ensue you achieve the best results?

According to an article on News.com.au there are 5 property fails that buyers need to know about.

PURCHASING a property is no easy task — there’s the house hunting, the securing of the mortgage, deciding whether it’s an investment or forever home, and the countless people trying to tell you their opinions. house property

So it’s no wonder that property buyers — particularly first home buyers — can fall for some common mistakes.

Here are five of the most common mistakes buyers make, according to Universal Buyers Agents Director Darren Piper.

1. Falling in love

Mr Piper said one of the biggest mistakes buyers make is falling madly in love with a home, and getting emotionally invested.

“Once a buyer starts making decisions with their hearts instead of their heads, that’s when they pay too much for a property, overlook important issues, and desperation kicks in, clouding judgment,” he said.

2. Paying too much

The sort of money involved with buying property is far greater than most other purchases in life.

So much so it can almost begin to feel like Monopoly money, and it becomes all too easy to expand your price range just a little, just in case your perfect home is waiting for a few thousand dollars more. property

“This is when a buyer will fall in love with a more appealing home that is just too expensive, and desperation kicks in,” Mr Piper said.

3. Not doing your research

The home may tick all the boxes, but failing to research the area is a big mistake that could lead to a life in a great home, but in a terrible area.

Mr Piper says it pays to get to know the neighbourhood you are potentially going to spend the rest of your life.

“Research nearby schools; find out about any current or future developments; make note of public transport; and make sure you check out the local crime rates,” he said.

4. Failing to prepare 

The smart homebuyer will make sure they have assessed finances and needs before making the househunting plunge. property mortgage finance money

“It’s important to analyse assets, organise debts, and get pre-approved for finance before starting the journey,” Mr Piper said.

“When purchasing a property, there are many things to think about, and some of these may be a surprise to first homebuyers.”

5. Underestimating costs

There are more costs involved in purchasing a property than just the property itself.

“Often, buyers fail to take into account building inspections and reports, strata reports, pest inspections, and council inspections,” Mr Piper said.

“There are also additional costs involved after you purchase a home, including insurance, moving costs, inspection reports, stamp duty, council rates and transfer fees.

Click here for the full article

The Art Of Networking And Why It’s Essential To Doing Business

In the world of business one of the most important things is finding a way to stand out and be remembered.

But it order to do that – one needs to know how to network.

This article from The Huffington Post looks at the art of networking as well as giving the ultimate do’s and don’ts.

Building a network that really works for your business is about having a continuous audit of the ways people you know connect and create opportunity.Handshake 2056023 1920

While most people agree with the cliché ‘it’s not what you know, it’s who you know’, it carries a lot more weight today as innovative collaborations can appear seemingly out of nowhere.

Janine Garner, entrepreneur and Fortune 500 mentor and author, told HuffPost Australia networking still matters – but it’s the network leaders build around themselves that matters more.

“Building a network that works is both an art and a science.

It is an art in that it requires basic human skills in communication, connection, authenticity and the ability to be ‘in the present’ and engaged with people and conversation,” Garner said.

“Building a network strategically requires an ongoing analysis and audit of the people within the network and a sustained curiosity around the levels of diversity and connectivity within the group. It’s about seeing the lines that connect people and ideas to create opportunity.”

Sheree Rubinstein from One Roof told HuffPost Australia opportunities arise because people back people.

Sheree Rubinstein’s Networking Dos and Don’ts

  • Networking is about striking up a conversation and conversations require people to listen. Take a genuine interest in others and ask them questions. Think about how you can  Agreement 2548138 1920help them not just about what you need from them.
  • Don’t over promise and under deliver. If you say you are going to do something (such as making an introduction) then stand by your word.
  • Nurture a relationship over time. If you meet someone at a networking event follow up with an email. Check in with that person regularly. Invite them along to events with you.
  • Don’t shy away from contacting someone for a meeting or coffee. Most of the time people will say yes.
  • Don’t burn bridges easily as people talk. Always approach networking and meeting people with integrity and respect to others.
  • View networking as long term opportunities not quick gains.

Click here for the full article

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Related articles:

MELBOURNE VOTED THE WORLD’S MOST LIVEABLE CITY – AGAIN!

MELBOURNE NAMED WORLD’S MOST LIVEABLE CITY 4 YEARS IN A ROW

NOT ONLY IS MELBOURNE THE WORLD’S MOST LIVEABLE CITY – IT’S RESILIENT



from Property UpdateProperty Update https://propertyupdate.com.au/weekend-reads-must-read-articles-from-the-last-week-23/

Thursday, August 17, 2017

Adelaide Housing Market Update [Video] – August 2017

The July 2017 CoreLogic Home Value Index results recorded a 1.5% rise in dwelling values across the combined capital cities for the month.

Adelaide’s housing market has continued to trend steadily higher with twenty values 1.1% higher over the month to be 2.5% over the year to date.

Dwelling values are rising only slightly faster than inflation and wages which is provided for very affordable home prices but not a great deal of wealth creation compared with markets like Sydney and Melbourne.July Highlights

In a positive sign the average selling time is reduced compared with a year ago indicating a strengthening selling environment which could support some additional price pressures in the market place.

YOU MAY ALSO BE INTERESTED IN READING:

Perth Housing Market Update [Video] – August 2017

Metropole Property Home Buyers Enquiry


from Property UpdateProperty Update https://propertyupdate.com.au/adelaide-housing-market-update-video-august-2017/

[On-Demand Webinar] The Top 10 Risks of Property Investing and how to Avoid Them

Learn the biggest risks in property investing and tips on how to avoid them



from Property Investment Blog http://blog.realestateinvestar.com.au/on-demand-webinar-the-top-10-risks-of-property-investing-and-how-to-avoid-them

Wednesday, August 16, 2017

The Next Brisbane BOOM will start here…..tick……tick

It’s official, the next Brisbane BOOM will be kick started by the expansion of our biggest employment hub – the Brisbane CBD.

The $3billion Queens Wharf Project and a number of other projects within the CBD will be like a stone in a pond that sets off a ripple effect throughout the rest of Brisbane. Next Brisbane BOOM

The projects are set to deliver more than 12 football fields of new development that will create a net increase of 11,500 jobs in this precinct alone.

Early construction works commenced earlier this year, with the Queens Wharf site due for completion in approximately 2022.

Not only will the project deliver thousands upon thousands of jobs, but it will also see a huge windfall for the state government after are economy stalled due the mining downturn.

01

Queens Wharf

The project is set to deliver 5 new hotels, including a new 6 star hotel form the iconic hotel brand – W Hotels.

There will be 3 residential towers and a choice of over 50 food and beverage outlets that will also encompass a huge Skydeck as the highlight with an outdoor cinema.

A new pedestrian bridge will also link this precinct to South Bank and beyond.

02

Casino

The Queens Wharf project will also incorporate and replace the existing Treasury Casino with a new purpose built facility known as the Brisbane Integrated Resort Development.

In what we will be a large project, the actual gaming floor will be less than 5% of the overall development.

It is also set to hand the State Government millions and millions of dollars in casino taxes alone!

300 George Street 

Another huge development that will complete the puzzle, will be 300 George Street.

This huge project will include an 82 level residential tower consisting of 428 apartments and 39 storeys of office space.

There will be another 5-Star hotel with a large retail shopping mall and even more restaurants, bars and cafes.

The top level will feature a podium level with modern lifestyle amenities including a playground, amphitheatre, BBQ and outdoor space.

03

State Government

Our State Government will also benefit greatly out of these developments to our CBD.

There will be the initial boost to tourism in Brisbane, estimated to bring in approximately $1.69bil.

Then there is the $272mil of staged payments from the Consortium and guaranteed Casino Taxes for the first 10 years of approximately $880mil.

This will see some much-needed funds flowing into the state’s coffers to enable future development of our great city.

In a recent interview, I discussed these major projects with Sam Degn from Colliers International. You can watch it below:

Summary

It has become apparent that Brisbane is building another small city within their CBD the size of 12 football fields

This will create a huge amount of jobs, not only upon completion, but also during the design and construction phase as our economy transitions from mining to the services industry. brisbane-city_2661799

It will also transform Brisbane from that sleepy country town to a major international city and draw tourists from around the world.

The money will also flow into the hands of state government that will enable further expansion and development of Brisbane and beyond.

This is great news for property investors as there will be a lot more jobs, wages will start increasing again and the flow on effect will see an increase in capital growth.

It will a positive 4-5 years in the lead up to these projects being completed and exciting to see the finished product.

A bright light is on the horizon for Brisbane… at last!



from Property UpdateProperty Update https://propertyupdate.com.au/the-next-brisbane-boom-will-start-here-ticktick/

How’s our economy going | August RBA Chart Pack

How’s our economy performing? 

Now that’s an important question if you’re a property investor or in business. RBA

Each month the Reserve Bank meets to discuss the state of the economy and set official interest rates and then releases its minutes to explain the reasons behind their monetary policy decision and a chart pack which I summarise for you here at Property Update each month.

But before I share their latest Charts, I’d like to share some of my thoughts I recently read on how the Australian economy is faring.

I was interested to read Peter Switzer call our current phase a “crazy economy!” He suggests:

  • Business is feeling good,
  • consumers are too negative,
  • wages aren’t rising by much,
  • business investment has been low,
  • interest rates are historically low,
  • house prices in Middle Park Melbourne were up over 40% last year,
  • the dollar is at 79 US cents when most economists thought it would be 69 US cents,
  • We had one negative quarter of growth over the past 12 months but the stock market returned 14% including dividends!
[Imported] WP Advertize it Free Strategy ad 10 July 2014 (Desktop #44800)

Switzer blames this is crazy economy on the GFC and the expansionary policies that central banks introduced worldwide to avoid a Great Depression.

But things are picking up and business conditions are the best in almost a decade – the global economy has improved, interest rates are low, wage pressures are contained and consumers are spending so why shouldn’t business be feeling good.

This means they’re likley to soon start employing more people and that’s a good thing for our ecoonomy.

Of course any predictions for the economy could be blown out of the water (literally) if the tensions between North Korea and the USA escalate.

So let’s see what the RBA Charts show:

INTERNATIONAL ECONOMIC GROWTH

Of course Australia doesn’t operate in a vacuum, so it’s important to start with the international context…

The slew of numbers across various major economies continue to suggest a mixed picture, but overall global economic conditions have picked up since the middle of 2016 and appear to be stronger in the first half of 2017 than they have been in recent years.

Conditions in the global economy are continuing to improve. 

Labour markets have tightened further and above-trend growth is expected in a number of advanced economies, although uncertainties remain. globe economy growth health world heart decline map

Growth in the Chinese economy has picked up a little and is being supported by increased spending on infrastructure and property construction, with the high level of debt continuing to present a medium-term risk.

The economic growth of our major trading partners is forecast to be around its long-run average this year before easing slightly in 2018, even though growth in China is a little uncertain.

The International Monetary Fund expects global economic growth of 3.5 per cent in 2017 and 3.6 per cent in 2018, compared with 3.2 per cent growth in 2016.

However, the IMF has identified a number of potential risks to the global economy, including inflated asset prices, a growing trend toward protectionism and the outlook for the Chinese economy.

 

 

Gdp Growth World

INFLATION

Headline inflation rates have declined recently, largely reflecting the earlier decline in oil prices.

Core Inflation Advanced Economies

EMPLOYMENT

Unemployment is falling in the 3 biggest economic regions, meaning their economies are slowly improving:

Unemployment Rate Advanced Economies

While many of the previous concerns of a world recession have faded, we’re in a low growth, low inflationary, low interest rate environment which is likley to remain that way for some time.job employment australia

Most central banks have been trying to stimulate their individual economies with low interest rates, but in general this has been to no avail.

Of course it’s much the same in Australia – our low interest rates are not stimulating the economy as much as the RBA would like – hence my earlier suggestion that I can’t see a rate rise any time soon.

Having said that, a conflict between the USA and North Korea, or a trade embargo by the USA placed on China because of it’s stance on this conflict could play havoc with the major economies.

AUSTRALIA’S ECONOMY

There has been a noticeable slowing in Australian growth momentum over the past few months – our economy is fragile.

Annual growth is currently around 1.7 per cent, which is well below the long term averages, more in line with the lower growth environment the rest of the developed world has experienced since the GFC.

However the RBA’s forecasts for the Australian economy are largely unchanged.

Over the next couple of years, the central forecast is for the economy to grow at an annual rate of around 3 per cent. Gdp Growth

Economic conditions continue to vary across the states.

Recently, economic growth has been strongest in Victoria, New South Wales and ACT  and weakest in Western Australia.

State Final Demand

And like the rest of the world, Australia is in a low inflationary environment which is of course one of the reasons the RBA can keep official interest rates so low.

The inflation rate edged lower in the first half of this year with consumer prices in Australia rising only 1.9 percent through the year to the June 2017.

 

Consumer Price Inflation

HOUSEHOLD SECTOR

The sluggish household sector is a concern.

Retail sales have picked up recently, but slow growth in real wages and high levels of household debt are likely to constrain growth in spending.

Retail Sales Growth

However household income growth has remained weak, and there has been a further decline in the household saving ratio.

Low growth in household disposable income continues to weigh on spending.

 

Household Income And Consumption

Having said that Australian households are amongst the wealthiest in the world, with our assets (primarily in real estate) increasing in value faster than our liabilities 9due to low interest rates).

Household Wealth And Liabilities

The graph below shows the interesting effect of our current low interest rate environment.

Despite record high levels of household debt, falling interest rates means that this debt is more affordable than ever with average household debt as a percentage of disposable income being at an affordable level.Household Finances

However consumer sentiment remains fickle, and currently more people are pessimist about their future than people who are optimistic.

When people don’t feel confident about their jobs or their future, they don’t spend.

Consumer Sentiment

OUR HOUSING MARKETS

Conditions in the property markets vary considerably around the country.

Housing prices have been rising briskly in some markets (Melbourne, Sydney and Canberra) although there are some signs that these conditions are starting to ease.

In other markets, prices are declining. graph of the housing

  • In the eastern capital cities, a considerable additional supply of apartments is scheduled to come on stream over the next couple of years.
  • Rent increases remain low in most cities.
  • Investors in residential property are facing higher interest rates.
  • There has also been some tightening of credit conditions following recent supervisory measures to address the risks associated with high and rising levels of household indebtedness.
  • Growth in housing debt has been outpacing the slow growth in household incomes.

The decline in higher-density approvals has been concentrated in New South Wales (where housing activity has been quite strong of late) and Queensland (where conditions have been less favourable.)

This is a good thing as supply of new apartments is currently  running ahead of demand, particularly in the Melbourne and Brisbane CBD’s.

Private Residential Building Approvals

OUR PROPERTY MARKETS ARE TAKING A BREATHER

The scorecard is in for the first seven months of the year and our property markets slipped down a gear according to Corelogic, gradually responding to higher mortgage rates, tighter credit policies and affordability challenges.

The latest results highlight the diversity of housing market conditions.

Most capital cities recorded a rise, however, a 3.1% gain in Melbourne was a significant driver for the strong monthly result across the combined capitals. melbourne

  • Combined capital city dwelling values increased by 1.5% in July 2017 with values increasing across all capital cities except Brisbane, Perth and Darwin.
  • Over the three months to July 2017, capital city dwelling values increased by 2.2% with values increasing in Sydney, Melbourne, Adelaide and Canberra but falling elsewhere.
  • Dwelling values have increased by 10.5% over the past 12 months with values increasing by more than 10% over the year in Sydney, Melbourne and Canberra.
  • Dwelling values have continued to fall over the past year in Perth and Darwin.

 

Housing Prices

Housing finance and credit data confirm investor interest in the housing market has started to drop off.

Affected largely by Australian mortgage lenders rationing credit to the investor segment, the lifting of mortgage rates is also starting to bite .

It remains to be seen if this slowdown lasts or, if once the rationing of credit eases, the investor segment of the market returns to residential property.

Housing Loan Approvals

TWO OF THE MAJOR DRIVERS FOR OUR HOUSING MARKETS:

Our housing markets are very dependent on consumer confidence.

There is a direct link between consumer confidence and housing turnover and rising prices.

  1. Consumer sentiment has fluctuated widely recently, and currently more of us have become pessimistic.

Consumer Sentiment2

2. Employment growth has been stronger over recent months, and has increased in all states.

The various forward-looking indicators point to continued growth in employment over the period ahead.

The unemployment rate is expected to decline a little over the next couple of years.

Against this, however, wage growth remains low and this is likely to continue for a while yet.

State Unemployment Rates

Employment Growth By Industry

THE BOTTOM LINE:

All in all, our economy is sound and we’re now in a period of low economic growth with low inflation, low wages growth and low interest rates.

By the way…the rest of the world has been operating in this environment since the GFCEconomy

We were sheltered from this by an extraordinary mining boom and our economy’s resilience to transition from this has been surprisingly impressive.

Of course there are still risks out there…

Which means the RBA is unlikely to increase interest rates for a while but the banks, under pressure from APRA, are raising their rates and at the same time causing a “credit squeeze” in an attempt to slow down the Melbourne and Sydney property markets.

This means as property investors for the foreseeable future we can’t expect the type of strong capital growth in property prices we experienced recently.

By the way…this doesn’t mean it’s the wrong time to invest in property.

What it does mean is that careful property selection is critical as you can’t count on the market to do the heavy lifting.

It also means a more stable property environment without the booms and busts.

WHAT DOES THIS MEAN FOR YOU?

Clearly owning property – your own home and investment properties is the way to wealth in Australia  

1-percent

If you’re looking for independent advice about property  no one can help you quite like the independent property investment strategists at Metropole.

Remember the multi award winning team of property investment strategists at Metropole have no properties to sell, so their advice is unbiased.

Whether you are home buyer or a beginner or a seasoned property investor, we would love to help you formulate an investment strategy or do a review of your existing portfolio, and help you take your property investment to the next level.

Please click here to organise a time for a chat. Or call us on 1300 20 30 30.

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from Property UpdateProperty Update https://propertyupdate.com.au/hows-our-economy-going-august-rba-chart-pack/

Property Development guide part 3 – Surround yourself with an “A” team

In this third installment of the Property Development Series, Bryce walks us through the professionals you need on your side throughout your property development project. 

The property development process has become more complicated over the last few years due to the increased influence of the state government, local councils and various interest groups in the town planning process.

The building process has also become more complex.  

A smart developer understands that they can never know everything there is to know in order to produce a profitable property development.

In order to complete a successful project you will need to assemble a highly skilled group of people to work with, and it is your responsibility to oversee the entire 25924140_lprocess with them – to be the producer of the project.

Your team’s extent and nature will depend upon the type of project you are involved in and the local political climate in which you intend to work.

As the developer, you will make all of the final decisions based on the qualified input of your expert development team.

Financiers of your project will also need to know that your development team has what it takes to manage the project to completion and will evaluate this particular element of your project carefully and critically.

A property developer who has an experienced team on their side with a proven track record gives your backer a great level of comfort.

It is essential to have a strong, experienced and responsive team of professionals to assist in optimizing your development opportunities.39184663_l

It is also important to have the right team for each of the particular projects you undertake.

For instance, it is unwise to engage an architect who may be skilled in commercial and industrial development to be involved in a residential project.

Furthermore, with the increasing complexities surrounding town planning, it is more important than ever to have an architect who is familiar with the regulations and requirements of your particular municipality.

Depending on a project’s complexity, it is likely that some or all of the following team members might be required;

  • Real estate agents 
  • Lawyers
  • Town planners and Urban designers
  • Property market researchers
  • Engineers – civil, structural, traffic, acoustic, environmental specialists
  • Architects, designers  or draftsmen
  • Landscape architects
  • Interior designers
  • Financiers
  • Building contractors
  • Project marketing specialists
  • Development managers
  • Project managers
  • Construction managers

Good planning and great design actually add value rather than cost you more in the long run.

Therefore I strongly suggest that you avoid cutting corners or costs when choosing the correct team.

Competent experienced consultants can help maximise your project’s potential, decrease construction blow-outs and add to the project’s appeal and marketability.

As stated earlier, each project you undertake will require a different development team, but let’s take a closer look at the following players who will generally have a hand in most projects you complete.

You – the Property Developer

You’re the leader who puts it all on the line to invest in a development project and as such, the buck stops with you when it comes to assembling and coordinating your development team and making the entire project a success. architect plan

Development Project Manager

If you are just a beginning developer, you can leverage of the experience of a proficient project manager who will have the industry knowledge and contacts that should take much of the risk out of your development project.

Lawyer

Having a legal expert who is familiar with real estate development and the town planning process on your team will usually save you many times what you pay them.

Lawyers can also be responsible for preparing the various documents and contracts required during the development process.

This includes the legal structure in which development occurs as well as documentation for purchasing the property, financing the property, consultant services, construction and leases.

Town Planner   planning town map council development build construction

Your planner should be familiar with relevant State Government planning policies as well as local government regulations.

Their primary role is to ensure the proposed project complies with planning regulations and assist in obtaining the permit through the maze of the approval process.

The planner must convince the local authorities of the project’s merit in order to obtain approval for it.

With the increasing bureaucratic red tape surrounding planning permits in recent years, town planners are often required to help write the application documentation.

They should also work closely with the architects or designers of your project and warn you of any areas in which your proposed project does not comply with development regulations.

Engineers

A number of different engineers may be employed on your development project. Geotechnical or soil engineers do a soil test to establish the site conditions. property mortgage finance money

The structural engineer’s role is to develop a structural design that is functional and cost effective to build and civil engineers may design the drainage systems.

You can read more about the roles of each engineer in the Team Series.

Financiers

While the property developer will contribute some equity to their project, almost all projects rely on a large amount of funding from outside financiers.

Financing development projects is very different to financing homes or investment properties and you must choose a financier familiar with the development process or find a mortgage broker who understands the development process.

Accountant

Your accountant will be an important part of the team and are required to ensure you are setting up the correct structure and maximising your profitability, whilst minimising your tax liabilities.

GST, and a distinction between capital and operating expenses are critical issue in financial accounting for developments and your accountant must understand the intricate accounting aspects of the development process. Builder and couple at new home under construction

Builder 

The builder is obviously a critical part of the development team.

Considering the unique nature of the town planning process it is likely that your particular project has never been built before.

Therefore you will need a builder who is able to work closely with the rest of your development team.

Real estate agent

An agent who will be leasing or selling your property should be brought in as an important part of your team early in the piece.

They should give you feedback on the marketability of your project during the design phase, as well as estimates of sale prices to enable you to establish your feasibility.

You need to find an agent who is active in the area where you are going to develop your project and is experienced in and successful at selling the type of property you intend to build.

If you have a good relationship with a marketing agent you should listen to their advice.

After all, they are the ones that are at the coal face with the potential purchasers or tenants all the time.

When the agent eventually gives you a marketing proposal look for the following…

  • The agencies experience in selling this type of property prior to construction 32931594_l
  • People in the agency who will work on your project,
  • Their feeling for the market in general and specifically for your project, sale values and rental values for similar properties.

Also consider their proposed marketing methods, target market and proposed fee.

In general the agent’s fee will be around 2 per cent of the sale price plus GST.

It is not advisable to be greedy with agents; you want them to work hard for you so do not try to cut their commission.

Property Strategist

A Property Strategist will oversee the project from the pre-purchase stage all the way to completion. property buyer

Their role is to help you research, locate and negotiate the purchase of property; maximise investment returns through property investment management; and understand the finance maze.

A great place to start is with Metropole Property Strategists – where the experienced team can offer a more structured and predictable approach to property development.

Remember, the overall success of your project hinges on your ability to delegate various responsibilities to the right team of professionals.

At the end of the day, a developer, like a movie producer, is only as good as the cast he or she assembles.

In the fourth installment of the series, Bryce Yardney, Property Development Specialist at Metropole, walks us through the steps involved in the entire process.

If you want to learn more about the property development process you may be interested in How To Get Started in Property Development

You may also be interested in reading our Team Series or check out our graphic guide to the Property Development Process.



from Property UpdateProperty Update https://propertyupdate.com.au/development-guide-part-3-surround-yourself-with-an-a-team/