Residential Apartments

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For the last few years, property trends have reflected the importance of resort-style amenities and private resident facilities for investors and owner-occupiers alike.

These mixed-use developments have become a new sector mainstay in Australia, according to Cromwell Property Group, with developers increasingly combining commercial, retail, leisure and residential.

Whether you’re an eager investor or an owner-occupier who desires resort-style facilities at your doorstep, here are five apartments with 5-star hotel amenities selling in March 2021. 
 

1. Seafarers, Docklands 
Address: 731 Flinders Street, Docklands VIC 3008 
One-bedroom apartments from $825,000

[smartcode_project:default project_id=27728]

Partnering with Australia’s first 1 Hotel, Seafarers integrates luxury residences and s luxury hotel amenities, management and services.

Designed by Fender Katsalidis, the project provides countless amenities to its residents including an indoor heated pool, jacuzzi, full-service fitness centre and spa.

To complement the convenience of hotel luxuries, Riverlee offers residents private amenities, including a library, dining and lounge. 
 

2. Beyond, Hurstville 
Address: 93 Forest Road, Hurstville NSW 2220 
One-bedroom apartments from $585,000

[smartcode_project:default project_id=6798]

Fridcorp’s latest Hurstville development, Beyond, features a number of on-site amenities that match the quality of the world’s best hotels.

Facilities include an outdoor dining and teppanyaki grill, gardens, lobby bar and residents’ dining.

For health and fitness, entertaining or quiet contemplation, residents can enjoy exclusive access to Beyond’s two podium platforms, which feature barbeque and dining areas as well as a yoga and meditation retreat. 
 

3. Cabana, Palm Beach 
Address: 1 Nineteenth Avenue, Palm Beach QLD 4221 
Three-bedroom apartments from $2,325,000

[smartcode_project:default project_id=84861]

Delivered by Ignite Projects, Cabana offers the best in luxury resort-style living.

The island-like oasis is located across from the recently completed Palm Beach artificial reef and includes its own private beach club.

A key feature of the development’s design, the private beach club includes day beds on and off the water, beachfront and poolside cabanas. 
 

4. Melbourne Grand, Melbourne 
Address: 560 Lonsdale Street, Melbourne VIC 3000 
One-bedroom apartments from $489,000

[smartcode_project:default project_id=3490]

With an entire tenth floor dedicated to resort-style facilities, Central Equity’s Melbourne Grand offers an outstanding living experience rising 58-storeys above the CBD.

Designed by Guildford Bell and Graham Fisher Architects, the development features an indoor pool, gym and yoga studio, residents’ lounge and 17-seat luxe theatre.

A coffee bar and banquet room also provide the ideal setting for entertaining family or friends. 
 

5. Grand Central Towers, Phillip 
Address: 15 Bowes Street, Phillip ACT 2606 
Apartment prices available at request

[smartcode_project:default project_id=7660]

Inspired by New York’s Grand Central Station, Geocon Group’s Grand Central Towers delivers a breathtaking balance of hotel-style luxury and amenity.

Designed by Cox Architecture, the project includes an infinity pool, gym, residents’ dining room, lounge and library.

A rooftop retreat with reflection pond, secure resident parking, car wash and bike workshop are among its other features.
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Mixed-use developments have become a new sector mainstay in Australia with developers increasingly combining commercial, retail, leisure and residential

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Urban's top 5 apartments with 5-star hotel amenities selling in March 2021

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The NSW Government has announced further details of the project to facilitate the removal of high-risk combustible cladding from residential apartment buildings across the State.                                                                                    

Minister for Better Regulation Kevin Anderson confirmed that Project Remediate would provide interest-free, 10-year loans, to strata owners corporations.

The program developed since the 2020-21 NSW Budget seeks the removal by 2023 of high-risk combustible cladding on an estimated 225 buildings across NSW.

There is a project assurance service that will be coordinated through the Office of the NSW Building Commissioner.

The scheme will also help take pressure off owners' corporations by appointing a managing contractor to oversee each individual project from design to final completion.

Under the project details announced today, a financial partner will be engaged to facilitate the provision of interest-free loans to eligible Owners Corporations to fund remediation works. 

Over the next few months, the NSW Government will be tendering for the financial partners and a managing contractor for the program. Applications for owners corporations to take part in the project will open in March.
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The NSW Government has announced further details of the project to facilitate the removal of high-risk combustible cladding from residential apartment buildings across the State

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NSW Government starts high-risk cladding removal process

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GUEST OBSERVER
Misinformation and scare tactics are clouding the debate around incoming strata reform.
The strata laws under which we operate are the oldest in the world so the system is in desperate need of an upgrade. The exponential growth in the popularity of strata ownership means that reform is urgently needed to bring it in line with modern life.
Bills do not apply to existing strata schemes, only future strata schemes with current strata owners having the option to opt in, so it will take time to see material change in the NSW system.
If 75% of residents agree to redevelop a strata development the remaining 25% will not be thrown out onto the streets.
The facts have been lost along the way here. One thing people need to be aware of is this strata reform is not retrospective. It will apply only to existing strata committees if they chose to sign on to it, and it will apply to strata committees that are established post the introduction of the reforms.
And in reality any collective sale of the strata development is complex and will take up to two years to achieve. The sale would have to go through courts and those in opposition will have the opportunity to argue their case.
Further facts are:
<ul>
<li>Old strata buildings are expensive to maintain. The upkeep of a dilapidated building is not only a burden to residents but also owners who wish to sell their apartments. </li>
<li>Strata unit owners stand to benefit. The majority of residents will make more profit from the collective sale of a strata development then if they were to go it alone. </li>
</ul>
Stephen Albin is chief executive of the Urban Development Institute of Australia and can be contacted <a href="https://www.udiansw.com.au/" target="_blank">here</a>.
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Dispelling the myths around strata reform: UDIA

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GUET OBSERVER
The NSW Civil &amp; Administrative Tribunal (NCAT) has the power under section 162 of the Strata Schemes Management Act 1996 to appoint a compulsory strata managing agent to a strata scheme.
This power is also contained in section 237 of the Strata Schemes Management Act 2015 which, but for part 11, will commence on 30 November 2016. The sections, which differ slightly, empower the NCAT the make an order that either all, or part, of the functions* of the owners corporation are delegated to a strata manager.
What does compulsory strata management mean? 
The simple answer is that it means different things in different cases. For instance, NCAT may order that all the functions of the owners corporation are to given to the strata management agent or, it may order that only a certain power or function is given to the strata managing agent.
If all the powers of the owners corporation are granted to the strata managing agent meetings of the owners corporation are not necessary. Instead of you, as a lot owner, voting to decide matters the strata manager will exercise their delegated power. If they do so they can raise levies, pass resolutions on behalf of the owners corporation and pass by-laws pursuant to section 65A. A by-law could also be passed pursuant to section 52 by the compulsory strata manager with the prior written consent of the lot owner granted the exclusive use right or special privilege.
On the other hand if the strata manager were only granted the powers of the executive committee, they could call meetings, pay invoices (unless restricted by the owners corporation at general meeting from doing so) and conduct the day to day affairs of the owners corporation but could not pass any resolutions that are required by the Act to be passed at general meeting. This would include resolutions to pass by-laws, to accept an easement or to alter or amend the common property.
Who can apply for an order for compulsory management? 
A wide variety of people can obtain an order to appoint a compulsory strata manager and it need not be a lot owner. They are:
anyone with an interest or estate in a lot in the scheme or if the scheme is a leasehold scheme, a lease of a lot;
anyone who has obtained an order under the 1996 or the 2015 Act that has not been complied with and that imposed a duty on the owners corporation, executive/strata committee or an officer of the owners corporation
an authority that has the benefit of a positive covenant requiring a duty of the owners corporation; or
a judgment creditor to whom the owners corporation owes a judgement debt
When can the NCAT make an order for compulsory management? 
Both the 1996 and 2015 Acts provide that the NCAT may make an order only if satisfied that:
(a)  the management of a strata scheme is not functioning or is not functioning satisfactorily, or
(b)  an owners corporation has failed to comply with a requirement imposed on the owners corporation by an order made under the Act, or
(c)  an owners corporation has failed to perform one or more of its duties, or
(d)  an owners corporation owes a judgment debt.
What does “not functioning or is not functioning satisfactorily” mean?
CTTT (the predecessor to the NCAT) Member Moore in Coote v Sharpe, Wentzel &amp; Owners Corporation Strata Plan 55434 stated that imposing a compulsory strata manager upon an owners corporation is a “draconian” measure as it “removes the democratic process which has been established” under the Act. As such, the reasons for a finding of dysfunction must be based on objective evidence. For this reason, these orders are not lightly granted.
Instances where an order for compulsory strata management has been made show that the following behaviour can be a sign of a failure to function when affects the management structure of the scheme:
<ul>
<li>a failure (or inability) to pass resolutions to raise contributions;</li>
<li>a continued failure to carry out required maintenance and repairs</li>
<li>a long history of acrimony, deep seated discord and or violence in the scheme;</li>
<li>the presence of a voting block, for instance, where divisions within the scheme see a 50/50 stand off meaning resolutions cannot be passed;</li>
<li>a pattern of strata managers terminating their appointment; and</li>
<li>a pattern of improper decisions making (i.e. decisions not made in accordance with the Act)</li>
</ul>
* The Dictionary to the Act defines “function” as “function includes a power, authority or duty.”
Allison Benson is legal practitioner director, Kerin Benson Lawyers and can be contacted <a href="https://kerinbensonlawyers.com.au/">here</a>.
 
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Property 101: Compulsory NSW strata management and how it affects you and your scheme?

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In March this year, apartment design standards will be implemented into the Victorian planning system, according to Secret Agent’s latest report.
Apartment design standards will ensure all future apartments in Victoria are desirable, safe, healthy and sustainable.
New developments in Victoria will only be permitted a planning permit if they meet these standards.
A 2015 community survey found that the top concerns of apartment amenity were “access to daylight, functional space, and natural ventilation”, as well as noise and energy efficiency. (DELWP, 2)
Standards have been made for 16 elements of design: Building setback, functional layout, room depth, windows, storage, noise impacts, energy efficiency, solar access to communal open space, natural ventilation, private open space, communal open space, landscaping, accessibility, building entry and circulation, waste and recycling, integrated water and storm water management.
It is logical to think that better design standards should produce apartments of a higher quality.
This in turn should increase the sale price of these apartments.
Secret Agent was engaged to determine the price premium of better designed apartments.
That is, how much more are consumers willing to pay for an A grade apartment compared to a B grade and C grade apartment?
In order to do this, four apartment factors which influence sale price were selected.
These were sunlight, natural ventilation, open views and outdoor space.
A sample of apartment sales in inner Melbourne was then collected.
Each apartment in the sample was rated as an A, B or C grade apartment depending on how many factors they had present.
• A grade apartments had all 4 factors.
• B grade apartments had 2 or 3 factors present.
• C grade apartments had 0 or 1 factor present.
Hedonic regression techniques were used to determine the price premium of A grade apartments over B grade and C grade.
This was done for two different samples which distinguished between sales in large apartment buildings (Sample 1) and those in buildings with 5 levels or less (Sample 2).
Sample 1 consisted of 886 sales and sample 2 consisted of 510 apartment sales. Factors such as date of sale, apartment size and location were all accounted for as part of the regression.
Table 1 shows the average price impact of an A grade and a C grade rating, relative to a B grade apartment in a building of over 5 levels.
In other words, on average an A grade apartment is expected to sell for $50,837 more than a B grade apartment,
<a href="https://www.propertyobserver.com.au/images/2017/06/Screen%20Shot%202017-02-06%20at%201.21.29%20pm.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/06/Screen%20Shot%202017-02-06%20at%201.21.29%20pm.jpg" alt="">
while a C Grade apartment is expected to sell for $49980 less than a B grade apartment.
This means that the average price difference between an apartment with a 4/4 rating and an apartment with a rating of 1/4 or lower is $100,817.
The results are similar for smaller buildings as shown in Table 2.
<a href="https://www.propertyobserver.com.au/images/2017/06/Screen%20Shot%202017-02-06%20at%201.21.35%20pm.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/06/Screen%20Shot%202017-02-06%20at%201.21.35%20pm.jpg" alt="">
Compared to B Grade apartments, an apartment in the sample is expected to sell for $63,728 more if it is A grade, and $39,794 less if it is C grade.
The difference between an apartment that has all four factors and one than has one factor or less is $103,522.
In smaller buildings, the positive impact of an A grade rating was of greater magnitude than the negative impact of a C grade rating.
The results also showed that if an apartment is cross ventilated, has good natural light, has an outdoor area and open views, then it is likely to sell for 21.3% more if in a small building and 17.3% more if in a larger building.
This demonstrates that better design standards will have a significant impact on apartment prices once they come in to effect.
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The price benefits of better designed apartments

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Last month a new $84 million, 140 apartment project in the Melbourne inner suburb of Richmond was launched simultaneously in Beijing, Shanghai, Singapore, Kuala Lumpur and Malaysia.
The strategy for the pre-launch was to create ‘the excitement of auction day’ in each location, and thus stimulate maximum buyer demand and competition for apartments. 
International property marketers Jalin Realty was the sales agency behind the move, using the sales platform <a href="https://investorist.com/" target="_blank">Investorist.com</a>.
Buyers and agents were invited to live launch events in each city, hosted by Jalin staff. 
The Investorist website displayed all project information (photos, plans, brochures, pricelists, reservations updates, videos, etc) on both large TV screens and computer monitors.  
A ‘live electronic sales board’ showed reservations immediately to the entire audience, so all sales were transparent with the country of origin shown.
The five simultaneous events resulted in reservations of approximately 30% of the stock, which within a few weeks were converted into contracted sales.
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Innovative technology behind simultaneous launch of Melbourne project in five Asian cities‏

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More than 100 buyers have bought apartments at Dux in Melbourne's Richmond, a project by local developer Little Projects. 
With a classically-designed façade, Dux on the crest of Bridge Road, Richmond Hill, will feature 175 one-, two- and three-bedroom apartments and townhouses spread over 11 levels.  
More than 90 per cent of the apartments and townhouses sold to local purchasers within a week of launching the $70 million project, said a media release.
The remaining apartments range in price from $475,000 to $1.24 million.
“There are a lot of new projects in and around the area but the feedback from our buyers is that Dux not only presents beautifully, it is in a prime location, its residential amenities are first class and the architecture and interiors are unlike anything else available,” said Little Projects general manager, Sales and Marketing, Fergus Humphries.
He says Dux’s diverse range of floorplans and price points provided with buyers with a range of options depending on their budget.
Architecture firm ROTHELOWMAN principal Stuart Marsland said the industrial-style design takes its inspiration from Richmond’s history with contemporary features, incorporating an attractive combination of warm bronzes, exposed brick facades and shimmering glass.
Dux’s facade features concrete panels in a repetitive ‘saw-tooth’ pattern outline the building’s main entrance (located on the building’s side), referencing the warehouse roofs of old Richmond, said Marsland.
Communal areas feature a swimming pool, landscaped dining terrace and city views.
The onsite display suite is open at 155 Bridge Road, Richmond.
Little Projects said it has delivered 1,777 apartments to date, with a further 100 to be completed in 2016.
 
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175-apartment project in Melbourne's Richmond nearly sold out

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<h3>In most cases, the flat, unit or apartment you are considering will be strata title:</h3>
<ul>
<li>Strata title is individual ownership of a unit or apartment within a multi-unit complex. At settlement, you will receive a certificate of title for the unit you bought and become a joint owner of the common property (common areas shared by all the unit owners).  </li>
<li>The unit owners are members of the owners corporation (formerly body corporate), which owns and manages the common property. An owners corporation is automatically created when a plan of subdivision containing common property is registered at Land Victoria.</li>
</ul>
<h3>If you buy the property, you will have the right to vote on decisions about the operation of the owners corporation and, among other responsibilities, must: </h3>
<ul>
<li>pay annual owners corporation fees, levies and charges </li>
<li>obey owners corporation rules. Rules may include things such as renovations to the property, pet ownership and noise levels. </li>
</ul>
<h3>You can research the owners corporation by reviewing: </h3>
<ul>
<li>the owners corporation certificate attached to the Section 32 statement (also known as a vendor's statement). This has details of current fees, insurance cover and maintenance works carried out. It also details any proposed works, fee increases and any potential or existing legal claims affecting the property  </li>
<li>the owners corporation manager’s details on the <a href="https://www.consumer.vic.gov.au/businesses/registered-businesses/owners-corporation-managers/public-register" target="_blank">public register of owners corporation managers </a>
</li>
<li>any contracts, agreements, leases or licenses affecting the common property  </li>
<li>the minutes of the owners corporation’s annual general meetings  </li>
<li>the contract of sale. </li>
</ul>
<h3>Finances: </h3>
<ul>
<li>What are annual owners corporation fees, levies and charges? Are you able to manage any increases in annual fees and special levies?  </li>
<li>Are there any fees or other monies owing to the owners corporation?  </li>
<li>Is there a bank account in the name of the owners corporation or a trust fund held by the manager?  </li>
<li>Can you see the owners corporation’s register or most recent financial statements, and the budget?  </li>
<li>Does the owners corporation have a credit balance or is it in debt?  </li>
<li>Has the owners corporation borrowed any money? Does it have other financial liabilities? If so, how much?  </li>
<li>Does the owners corporation have a maintenance fund? How much are you required to contribute? </li>
</ul>
<h3>Plan of subdivision: </h3>
<ul>
<li>Will you be a member of more than one owners corporation? </li>
<li>What would your lot entitlements (voting rights) and lot liabilities (your contribution to the owners corporation/s) be as part of the whole development?  </li>
<li>Check the measurements of the apartment and the car space. Are they the same as shown in the plan of subdivision, brochure and the contract of sale?  </li>
<li>Is the car parking space a lot and part of your title? If so, ensure that the car parking space is transferred with the title.  </li>
<li>Is the car parking space common property? If so, ensure you have a lease or a licence. </li>
</ul>
<h3>Maintenance and repairs: </h3>
<ul>
<li>Are there any proposed maintenance, renovations or other building works? Has the owners corporation already raised the funds to cover the cost of the building works? Will there be a special levy? </li>
<li>Is there a maintenance plan? If so, ask to see it. If there is a plan, there must be a maintenance fund.  </li>
<li>Are there any guarantees and warranties on building works and finishes? Are the documents referred to in the contract of sale? </li>
<li>Are the building works and finishes completed? Are there any defect claims?  </li>
<li>Is there sufficient reinstatement and replacement insurance cover for the building? </li>
<li>Are there any obvious structural issues, damage or repairs needed to the building? Consider organising an independent building inspection. </li>
</ul>
<h3>Management issues: </h3>
<ul>
<li>Does the owners corporation have a registered manager? Check their registration on the public register of owners corporation managers</li>
<li>Is there a resident building manager or caretaker manager?  </li>
<li>When was the last annual general meeting? Ask to see its minutes. How many complaints were reported to the owners corporation?  </li>
<li>Is there a committee? Can you contact the chairperson?  </li>
<li>Does the owners corporation have rules? Are the rules registered at Land Victoria? </li>
<li>What is the grievance procedure?  </li>
<li>Are any legal proceedings affecting the owners corporation? If so, ask for details or copies of the application or complaint. You should get legal advice before signing the contract.  </li>
<li>Check for any record of a Victorian Civil and Administrative Tribunal decision affecting the owners corporation or the address or the building. The tribunal’s decisions are available for download from the <a href="https://www.austlii.edu.au/" target="_blank">Australasian Legal Information Institute website</a>. </li>
</ul>
<h3>When looking at an apartment or unit, consider:</h3>
<ul>
<li>Can you hear people walking and talking in other apartments?</li>
<li>Can you smell cooking? </li>
<li>Are you near the garbage bins or waste collection areas? Are there any odours? </li>
</ul>
 
For more information <a href="https://www.consumer.vic.gov.au/housing-and-accommodation/buying-and-selling-property/checklists/buying-an-apartment-or-unit" target="_blank">visit the Victoria government website here</a>
 
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Buying an apartment in Victoria

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Inner Brisbane projects a picture of surging demand for off–the–plan apartments since 2013, creating record supply in future, while units rented out occupy a major share of all apartments in the area, according to the latest findings from research firm BIS Shrapnel.
Demand for Inner City apartments from investors shows little signs of abating in the short term despite its impact on rents, with completions to peak in 2016/17 at more than 7,000 apartments. Also, Brisbane's relative affordability compared with Sydney or Melbourne means more investors will choose Inner Brisbane apartments (IBA), says the paper titled Inner Brisbane Apartments Market Brief 2016.
The research focuses on indicators relating to demand, supply, rents and prices.
The major locations in Inner Brisbane to see developments on a large scale are CBD/Spring Hill, Inner East, Inner North, West End, Toowong, Woolloongabba and Hamilton.
APARTMENT PROFILE
Rental apartments account for 58 percent of total apartments in the IBA area, considerably higher than the 29 percent share for all dwellings across Greater Brisbane. This highlights the preference of investors to purchase properties close to good transport links and major commercial, retail and entertainment centres, where tenant demand is likely to be greatest.
Owner occupied dwellings represent 31 percent of IBA area stock, with a slightly greater share of these having a mortgage (being purchased). Conversely, a significantly higher 63 percent of Greater Brisbane dwellings are owner occupied.
Unoccupied dwellings—those that are held as second homes or kept empty as a speculative investment— comprise 11 percent of total apartment stock in the IBA area, compared to 8 percent across Greater Brisbane. It is expected that this level will increase from 2014/15, given the level of overseas demand and the potential that many may be held and not released to the rental market.
<a href="/images/2016/05/23/Screen%20Shot%202016-05-24%20at%209.23.52%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/05/23/Screen%20Shot%202016-05-24%20at%209.23.52%20AM.png" alt="">
DEMAND PROFILE
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The age profile of apartment residents suggests that people first rent when moving into the IBA area, with 47 percent of occupants in rental households aged 20 to 29 years old. If people remain in, or move into, the IBA area beyond 30 years of age, there is a higher propensity to purchase an apartment.
Households with a mortgage are mostly younger, with 50 percent of people occupying an apartment being purchased aged 30 to 54 years old. Within fully owned apartments in the IBA area, the demographic is older, with 59 percent of occupants in these apartments aged 55 years old and over. 
<a href="/images/2016/05/23/Screen%20Shot%202016-05-24%20at%209.26.16%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/05/23/Screen%20Shot%202016-05-24%20at%209.26.16%20AM.png" alt="">
Demand Drivers
An analysis of the age profile of apartment residents suggests three main groups driving occupier demand: students, younger adults, and older empty nester adults.
Students account for 17 percent of the IBA population, with 56 percent being overseas students. Overseas students create instant demand for accommodation, opting to reside close to their place of study. After a post-GFC decline, overseas student enrolments have been in recovery mode since 2014, driven by a lower Australian dollar. The improvement has occurred across all education sectors. 
The young adult apartment population is typified by those in white collar employment. Inner Brisbane employment growth has been weak in recent years due to State Government cost cutting and a reduction in mining services jobs. There is evidence that the decline may have bottomed out, although the recovery is likely to be slow (Chart 4).
Empty nesters are classified as those aged 45 years old and over, being either singles or couples without children. Empty nesters comprised 28 percent of the non-student adult population in the IBA area at the 2011 Census. 
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<img src="/images/2016/05/23/Screen%20Shot%202016-05-24%20at%209.30.13%20AM.png" alt=""> 
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INVESTMENT
Rental Vacancy Rates
Vacancy rates in Inner Brisbane remained below the balanced market rate of 3 percent from June 2004 through to June 2013, except at June 2009, when a rapid reduction in standard variable rates and the introduction of boosted incentives to first home buyers during 2008/09 encouraged existing and potential tenants to become owner occupiers.
Unlike Middle and Outer Brisbane, vacancy rates in Inner Brisbane have increased since 2013/14, reaching 3.8 percent at December 2015. While some of this rise may reflect the rate of new stock coming to the market and the time required to fill the stock, the steady rise in vacancy rates through 2014 nevertheless suggests that an excess of rental stock is emerging within Inner Brisbane. 
<a href="/images/2016/05/23/Screen%20Shot%202016-05-24%20at%209.32.16%20AM.png" target="_blank">Click to enlarge</a>
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Table 1 (main picture) outlines the weighted median two bedroom (the most common type of unit) rent and weighted median unit price of the IBA area post codes, along with an indicative yield representing the rent divided by the price.
Unit rental yields increased to a peak of 5.52 percent at June 2012, and remained at a similar high level over the following year. Combined with the low interest rate environment, investor demand strengthened and drove solid unit price growth of 5.9 percent in 2013/14.
Relatively low borrowing costs also reduced cash outflows for investors and diminished the necessity for landlords to increase asking rents, particularly with low borrowing costs making it easier for tenants to shift to owner occupation. As a result, rental growth remained below 1 percent per annum since 2012/13. Unit yields eased to a low of 5.08 percent at June 2015.
Rising vacancy rates will limit rental growth in 2015/16 to an estimated 0.1%. Moreover, preliminary data suggests unit prices may have declined, as the record level of apartment completions in 2015/16 creates increased competition and has a negative impact on resale prices. With a decline expected in prices of 2 percent in 2015/16, the indicative yield for a two bedroom apartment in the IBA area will improve slightly to 5.19 percent at June 2016. 
SUPPLY PIPELINE
Off–the–plan apartment demand within the IBA area has escalated from 2013, attributed to attractive yields, low or volatile returns for other investments and low interest rates. The rise in off–the–plan sales has allowed a greater number of projects to reach sufficient pre-commitment levels to obtain finance and begin construction. As a result, the IBA Area experienced a sharp increase in apartment completions in 2014/15 to 2,920 apartments. The period between peak demand and the subsequent lag of pipeline supply reaching the market has apartment completions set to soar to record levels over the next few years. In 2015/16, we estimate that approximately 3,250 apartments will be completed, surpassing the record high set just the year before.
In the short term, demand for Inner City apartments from investors shows little signs of abating despite the potential impact on rents and prices of further sizeable new additions to the rental stock across Inner Brisbane. Based on the current pipeline, completions are on track to peak in 2016/17 at over 7,000 apartments, of which investor owners will continue to form the bulk of underlying demand. Relatively less expensive apartment prices, and more attractive rental yields compared to their respective home markets, is likely to sustain demand for IBA stock from investors in Sydney and to a lesser extent, Melbourne. Similarly, this should also see overseas investors increasingly favour Inner Brisbane apartments over Sydney or Melbourne with demand from other countries also underpinned by a preference to invest in more transparent and stable political environment. 
Consequently, IBA Area completions are on track to escalate above the record levels in 2015/16, increasing to a peak of 7,182 apartments in 2016/17, 6,468 apartments in 2017/18 and 5,497 apartments in 2018/19. The West End and Inner North precinct will be the mainsource of new apartments in the IBA area over the three years to 2018 accounting for 60 percent of all new supply. Apartment completions as a proportion of total IBA area is expects to be next greatest in CBD/Spring Hill (13 percent) and Toowong (10 percent).
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Inner Brisbane apartments a huge draw with investors in spite of record supply: BIS Shrapnel 

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An $11 million apartment in Mirvac's The Eastbourne has sold, achieving a sqm rate at almost $24,000 per sqm.
It eclipsed the previous record held by the Salta building at 150 Clarendon Street which has long been the benchmark for prestige living in Melbourne.
With the Grand Pavilion Penthouse yet to hit the market however, the new record may not stand for long, with price expectations exceeding $30,000 per sqm.
The penthouse will feature 50 metres of frontage and an outdoor pool offering views across Fitzroy Gardens.
The Eastbourne is a classically terraced building set across 11 levels fronting Fitzroy Gardens, boasting spectacular views of the CBD and neighbouring abundant greenery.
Construction is set to start in the coming months on the Bates Smart development, so the design suite, which is now open to the public, will only be on site for a limited time.
John Carfi, Mirvac's head of residential said The Eastbourne’s recipe for success had been tried and tested previously at Mirvac’s landmark St Kilda Road development The Melburnian.
“We knew we had something special here and that determined our approach and our collaboration with Bates Smart to create a landmark project befitting its location and address,” he said.
“It is wonderful to see the success of The Melburnian replicated in East Melbourne, where purchasers have jumped at this unique opportunity.”
The first release comprised the Pavilion Collection – the project’s premium residences boasting large terraces with views over the Fitzroy Gardens and price tags starting from $2 million.
More than 90 percent of this stage has been sold to some of Melbourne’s most highly regarded people, including residents from the famed 150 Clarendon building on the other side of the park, upgrading to East Melbourne’s newest address.
One, two and three bedroom apartments are available, starting from $500,000, with these apartment aimed at the discerning young professional market.
Carfi said that families with young and teenage children have been attracted to the lifestyle advantages of The Eastbourne.
He also suggested that Sydney-siders have seen value in the building and customers are flying down to buy.
The project will also feature a dining room with chefs kitchen, resident's lounge with courtyard and barbecue, a cinema room and a business centre.
With demolition already underway, construction is set to commence early in 2017 and completion expected by mid-2019.
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<div title="Page 2">Over <a href="/expert-insights/buying/49833-mirvac-s-plans-for-pavilion-penthouse-overlooking-east-melbourne-parkland" target="_blank">3000 expressions of interest</a> were lodged by interested buyers when the project was launched. </div>
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<div title="Page 2">For more information, <a href="https://theeastbourne.mirvac.com" target="_blank">click here.</a>
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