Marshall White Projects Newsletter Edition 16

Projects Review Edition 16. 2019

Going Green

Protection From Dodgy Developers!

Labor’s Key Tax Policies

REA Buyer Journey Consumer Research

Data and Technology in the Development Industry

Five Minutes With...

Contents

Contributors

1 Notes From The Directors

Going Green — Jodie Walker, Author, Secret Agent

2 Spotlight 6 Going Green 8 P rotection From Dodgy Developers!

10 Labor’s Key Tax Policies 12 R EA Buyer Journey Consumer Research 18 Data and Technology in the Development Industry 20 Five Minutes With...

Projects 3 Parq

Protection From Dodgy Developers!

— Melissa Heagney, Senior Journalist, Domain Labor’s Key Tax Policies — Dani Di Blasio, Partner, Murdoch Partners REA Buyer Journey Consumer Research — Hall & Partners and realestate.com.au Data and Technology in the Development Industry — Nick Holuigue, Partner, Murdoch Partners Five Minutes With...

Featuring: — Jian Zhou, BHC Property — Danny Ciarma, Urban DC — Robert DiCintio, Trenerry Property Group — Nolan Stevens, Buxton Group — Nigel Hunt, Mclaren Property Developments

3 Central Park 4 Ten to Twelve 4 Tailor 4 East Village 5 Botanical 5 Aintree Park 5 Gardenia Park Past Project Profiles 24 Luar 24 Bloom 25 Balmoral 25 Emerald Grove

Cover Photo: East Village 283 – 289 High Street Prahan

+ 61 3 9822 9999 1111 High Street, Armadale VIC 3143

Disclaimer: Information provided is believed to be accurate as at the date of printing, no responsibility is taken for any errors or omissions.

It is your responsibility to obtain independent, professional advice.

Notes from the Directors Welcome to the second edition of Marshall White’s Projects Review for 2019.

One of our earlier newsletters featured our article titled ‘The Death of the One bedroom Apartment’, where we then made comment that a number of developments under construction today had no one bedroom offerings or that those one bedroom apartments intended to be built, had been stripped out prior to construction commencing. This is slowly changing with 5 – 10% of the total apartments we offer off the plan today are one bedroom.

It is worth noting that this particular supply is tempered by the fact that most investors will be recommended to purchase two bedroom, two bathroom apartments and as developers are very aware there is a greater profit in two and three bedroom apartment sales as opposed to one.

Developments such as ‘Bloom’, in Glen Huntly Road Carnegie, have been keenly sought by the first home buyer (83% of total sales to date average $500,000) and at the other end of town, the spectacular ‘St James Park’ in Yarra Street Hawthorn is evidence of ‘build it and the empty nester will come’ with an average sale price at well in excess of $2.5 million.

Of course, the question is always, will it continue? It’s increasingly likely the RBA will move on interest rates at some time during the year (whether the banks pass it on is another thing altogether), and Labor’s platform to amend capital gains tax has a long way to go before coming into effect, if at all. With a federal election announced for the 18th of May, there typically follows a great deal of hype, rhetoric and misinformation in regards to each parties’ policies.

We’ve asked respected financial commentators, Murdoch Partners, to review the Labor parties policies and gauge the potential impact to a property developer, if and when it gets up.

We’re very fortunate to work with a number of the best people within the projects universe who all seem to share a common trait, namely their willingness to share what works for them and what doesn’t.

The old adage of ‘success leaves clues’ has been one of the fundamentals that in 2013 founded Marshall White Projects and over the years we’ve attempted to distil what these champions of the industry do on a day-to-day basis.

These practices also insulate them from the vagaries of an everchanging development landscape. For this reason we’ve returned to the popular ‘Five Minutes With….’ where these men and woman comment on topical issues.

This edition also talks of the governments continuing crusade to enforce greater consumer protection, where developers will now require a purchaser’s consent or alternatively a court order to cancel a contract of sale should they wish to rescind a sale after the expiry of a sunset period. So hands up for those who want to do that today! … not many … of course not. Given the market correction from the past six months to today, not many developers, investors or financiers are interested in cancelling deals in the forlorn hope of selling for more the second time around (particularly given the increased cost per sale during the same period).

The theme of ‘Going Green’ is highly topical with REA’s recent insight report showing that a project’s energy star rating and the extent of landscaping are an increasingly high priority for an off the plan purchaser, particularly within young professional couples (it is worth noting that this buying group currently comprises up 70% of MWP’s total sales). Our development aptly called ‘Highgreen’ in High Street Glen Iris is an excellent example of this.

Finally, a common developers lament is ‘just tell me what a buyer wants and I’ll give it to them!’. The conundrum is being able to readily identify a commonality throughout the various buying groups that make up off the plan purchasers. With Marshall White Projects personally interviewing over 2,200 potential purchasers a year, understanding what they want (and then modifying a development to suit pre or post planning) is a constantly evolving exercise. REA in their latest insight report provide highly relevant information into what, where and how these off the plan purchasers react to todays market.

As always, good selling.

Mark Dayman Director

Leonard Teplin Director

T: 03 9832 1193 M: 0409 342 462 mark.dayman@marshallwhite.com.au

T: 03 9832 1191 M: 0402 431 657 leonard.teplin@marshallwhite.com.au

1

Spotlight

Stephen Edwards

Georgie Lupson

Kierra Hagedorn

Sales Executive

Executive Assistant to the Project Directors

Sales Executive

An appreciation for the life-changing nature of an off the plan real estate transactions trains Stephen’s focus on the human aspects of the real estate industry, ensuring his clients are comfortable throughout each transaction. A huge advocate for excellent communication, Stephen makes every effort to establish a pleasant and enjoyable experience for his clients looking to own their new apartment or town home.

Stephen’s twelve-year journey as a business owner has provided him with a rich understanding of the importance of community spirit and hard work. Having bought and sold numerous properties and blocks of land himself over the years as well as renovated and managed his own development projects, Stephen’s ability to demonstrate real empathy has become a predominant part of his negotiation style.

Originally from Sydney and having spent a large proportion of his career in Queensland, Stephen works to maintain his ties with family and friends all over Australia as well as following his love of sport and socialising in Melbourne. Husband to Summa and father to two daughters, Stephen has also coached junior rugby for many years.

2

A stellar work ethic and determination has seen Georgie flourish in her role in the Marshall White Projects team. Approachable and genuine, Georgie is a sales administration specialist whose professionalism and positive outlook make her a delight to engage with.

Georgie possesses superb attention to detail and exceptional management skills, ensuring she is impeccably organised and well prepared at all times. With broad experience across a range of departments, Georgie is a valuable team member who understands clients’ needs.

Educated at Loreto Mandeville Hall in Toorak, Georgie is highly knowledgeable of the Stonnington area and loves sharing her recommendations with clients.

Outside of work, Georgie is involved in local sports and is an avid golfer and AFL footballer in the VAFA league. A fervent supporter of the Melbourne Football Club, Georgie also enjoys travelling and exploring Melbourne’s great beaches.

A driven and compassionate sales executive, Kierra has grown a stellar reputation for outstanding results and exceptional customer service.

Kierra’s process-driven approach and excellent communication skills complement an innate attention to detail and genuine care for each person she encounters. A firm believer in spending as much time as necessary to gain a comprehensive understanding of what her clients seek in a new home, she is wellpositioned to achieve tailored outcomes.

Kierra relishes the opportunity to forge strong relationships and connections with clients and colleagues alike. Having spent several years of her career as an integral part of Australia’s top performing real estate team helping with over 800 sales and settlements, Kierra has an enviable depth of knowledge of the real estate industry.

Kierra has an appreciation for property, architecture and the ability to change someone’s life that her chosen career entails. Kierra is an empathetic individual and an active contributor to the Marshall White Foundation charity committee.

Outside work, Kierra embraces every available opportunity to travel abroad and engage with different cultures.

Parq 134 McKinnon Road McKinnon

Central Park 2a Nyora Street Malvern East

3

Current Projects Ten to Twelve

Tailor

10 – 12 Lindsay Street Brighton

481 Victoria Street West Melbourne

East Village 283 - 289 High Street Prahran

4

Botanical

Aintree Park

16 Spring Road Malvern

1432 Malvern Road Glen Iris

Gardenia Park 8 Genista Avenue Boronia

5

Going Green

Secret Agent has intensively investigated the impact that location and environment has on property value in the past. In this report we are going to summarise our research on one of the most important factors which influence what a good location is: greenery.

6

Closely overlapping with walkability is green space. The more greenery on a street the more it promotes walking. Green space is good for us, not just in terms of physical health as a result of increased walkability, but also for our mental health.

A study in Adelaide (Sugiyama et al, 2008) looked at the relationship between greenery and health. This study was interesting because they separated health into physical and mental components and looked at the effect of green space on each.

Those who perceived their neighbourhood to have the most greenness had almost twice the odds of being in the better mental health category compared to those who perceived little greenness in their neighbourhood.

This remained significant even after adjusting for walking and social interaction.

Their results show that greenery does influence our mental state. It would make sense that greenery would have an influence on property value. If the character in a green street makes us feel nicer, then we are probably going to be wiling to pay more for our home. We might not think it at the time but our perceptions can influence us subconsciously.

I’m sure you have experienced a time when something just felt right or felt worth it, even if you couldn’t fully justify it with logic. We don’t know if this is actually why greenery adds value to property but we have found that greenery does in fact have an influence on price.

Secret Agent studied greenery and its impact on property price in 2013. 2100 inner Melbourne property sales were categorised into three different groups according to the type of street they were located on.

The street types were rated according to the amount of greenery; they either had dense vegetation, sparse vegetation or no vegetation.

The analysis showed that when compared to houses on streets with no vegetation, those on streets with dense vegetation sold for $340,000 more on average. In comparison to houses on streets with sparse vegetation, those houses on streets with dense vegetation yielded an extra $135,000 on average.

If we switch the perspective and look at prices first, the effect is even more dramatic. Houses priced over $900,000 were more likely to have dense street vegetation. Houses between $400,000 and $700,000 were more likely to have sparsely vegetated streets, or no vegetation at all.

We are biological creatures created over millions of iterations of evolution. Our preferences are shaped by this. Green environments are deeply desired and will continue to attract those who are resource rich to those very areas.

— Jodie Walker Author, Secret Agent PH: +61 3 9349 4333

REFERENCES They found that greenness was associated with both physical and mental health, as well as walking for recreation, social cohesion and local social interaction, but greenness was not associated with walking for transport. Those who perceived their neighbourhoods to have the most greenness had a 40% higher odds of belonging to the better physical health group compared to those who reported the lowest level of greenness. However, the association between greenness and physical health became non significant when walking was adjusted for showing that walking probably mediates the relationship between greenness and physical health.

Sugiyama et al, 2008, Association of neighbourhood greens with physical and mental health: do walking, social coherence and local social interaction explain the relationships?, J Epidemiol Community Health, 62(9).

7

Protection From Dodgy Developers!

Victorians buying off the plan properties, including house and land packages and apartments, will get greater protection from dodgy developers under new laws to be introduced to state parliament.

Changes to legislation will make it tougher for developers to deliberately delay their projects by not registering land titles by set dates before terminating sale contracts to take advantage of rising land prices across Melbourne.

They have been using existing laws to “claw back” the land, returning deposits and on-selling it for a much higher price, or asking the original buyers for more money based on its current value.

The dodgy practice being used by some developers involves using a “sunset clause” which allows them to terminate a contract of sale if the subdivision of land or strata lots is delayed.

Under current laws buyers are also able to terminate the contract if these timeframes are not met.

But, under changes to the Sale of Land Act, off the plan developers of housing estates and apartment blocks will need the permission of land or apartment buyers, or the Supreme Court, to enact these sunset clauses.

Consumer Affairs minister Marlene Kairouz, who is set to introduce the changes for a first reading on Wednesday, said the changes would ensure developers were unable to take advantage of those buying off the plan.

This included new house and land packages mainly being bought by vulnerable first-home buyers in Melbourne’s outer ring suburbs. The government was made aware of the issues after stories appeared in Domain and The Age. “We’re taking action to make sure that Victorians aren’t being ripped off by dodgy developers – the days of misusing sunset clauses to make super profits are over,” Ms Kairouz told Domain on Tuesday.

“This is about improving consumer protections and restoring balance so that hard-working families can enter the property market with confidence.”

The new laws will be backdated to August 23 last year — from when the legislation was first announced — meaning any landowners who have had sunset clauses enacted on that date or after, are able to stop the developers from clawing back the land.

The legislation changes come after NSW in 2015 moved to similarly change its sunset clause laws after a number of issues.

8

The problem has been widespread; Consumer Affairs Victoria received 64 complaints in 2018 about dodgy sunset clauses, mostly in Melbourne. More complaints were received directly by lawyers.

“I congratulate the state government for bringing it in and with the retrospective date,” Mr Benjamin said. “It’s timely that it’s done because if the economy starts to pick up again, which it may do after the May [federal] election, developers will take advantage of that,” he said.

Solicitor with Michael Benjamin & Associates Michael Benjamin welcomed the news of the changes to legislation.

Last year, Mr Benjamin represented four Keysborough landowners who had bought into the Green Village Property Development over the issue.

Mr Benjamin has represented a growing number of clients affected by sunset clause clawbacks across Melbourne.

They bought land off the plan in 2015 for between $362,000 and $409,000. Several blocks in the development sold for $630,000 in

2018. Their sales of contract were terminated when the developer failed to register land titles within 36 months.

He said another five clients from across Melbourne have been referred to him facing sunset clause issues.

Other buyers of off the plan townhouses and units in the inner city and Clayton have also been affected under the clawbacks.

— Melissa Heagney Senior Journalist, Domain PH: 1300 799 109

While the landowners from the Keysborough estate won’t benefit from the new laws, because their sunset clauses pre-date the new laws, others who Mr Benjamin is representing will.

9

Labor’s Key Tax Policies A Review of Labor’s Key Tax Policies Ahead of the 2019 Federal Election With 2019 now well underway, focus is rapidly turning to the upcoming federal election with many predicting that an election for both houses will be held sometime in May 2019.

Although an official date has not yet been set, several key elements of Labor’s proposed tax and superannuation policies have already been communicated and they propose significant changes to the current law should they be enacted.

While we note that the proposed changes would require legislation in addition to Labor successfully being elected, it is prudent to be aware of these policies given the changes proposed.

The following table provides a summary of the key proposed Labor policy changes together with the comparable coalition position:

LABOR POLICY

COMPARABLE COALITION POLICY

Income Tax Disallow the claiming of excess imputation credits as cash refunds for Individuals and SMSF’s.

No change is currently proposed – Individuals & SMSF’s are able to receive cash refunds of excess imputations credits.

Reduction in the general CGT discount from 50% to 25% for assets held for more than 1 year (some exemptions apply).

No change is currently proposed – 50% general CGT discount for assets held for more than 1 year.

Limitation on negative gearing to investments in newly constructed housing.

No change is currently proposed to the current negative gearing rules.

Taxing of trust distribution to adult individuals – minimum tax rate of 30%.

No change is currently proposed – the taxing point remains at the beneficiary level.

Immediate claim of 20% on eligible depreciating assets under new Australian Investment Guarantee scheme.

On 29 January 2019 it was announced that the immediate asset writeoff available for small businesses would increase to $25,000 until 30 June 2020.

Wind back of recent legislation introducing staggered tax cuts to individuals.

No change is currently proposed to the Governments personal income tax plan announced in the 2018-19 federal budget.

A $3,000 cap to be applied to individuals claiming deductions for managing their tax affairs.

No change is currently proposed – no cap on deductible costs for managing your tax affairs.

Superannuation

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Further decrease in the Div. 293 tax assessment threshold from adjusted taxable income of $250,000 to $200,000.

No change is currently proposed – adjusted taxable income for the Div. 293 tax assessment remains at $250,000.

Removal of tax deduction for personal superannuation contributions.

No change is currently proposed to the recently introduced legislation for deductible personal superannuation contributions.

Reduction to the non-concessional contribution cap from $100,000 to $75,000.

No change is currently proposed – the non-concessional contribution cap remains at $100,000 & the bring forward arrangement is still available.

Prohibition on direct borrowing by SMSFs on housing investment via LRBAs.

The coalition has not indicated any change to the current limited borrowing arrangement rules.

Removal on freeze in the superannuation guarantee rate - 9.5%.

No immediate increase to the SG rate is currently proposed.

Labor’s Policy In Brief Income Tax

Superannuation

Cash refunds from excess franking credits to be disallowed from 1 July 2019 for individuals and self-managed superannuation funds.

Decrease in the adjusted taxable income threshold for Div. 293 tax assessment purposes (additional tax on super contributions for high income earners) to $200,000 from its current level of $250,000;

This would result in the reintroduction of a non-refundable tax offset whereby franking credits that exceed a taxpayer’s liability would be forfeited.

You should seek financial advice in relation to your investment strategies going forward.

Proposal to halve the current CGT discount percentage from 50% to 25% for all assets which are held for more than 12 months.

This change will apply from an effective date yet to be determined and it is unclear whether all investments made before the date of change will continue to attract the full 50% discount under grand-fathering provisions.

Proposal to limit negative gearing only to newly constructed housing.

From the effective date of change, taxpayers will only be able to offset their net rental loss against other taxable income (e.g. wages) where the property loss has been generated on a ‘newly constructed house’.

Where investments made in shares and preowned dwellings post enactment of proposed legislation, that result in an income loss, these losses will not be available to be offset against other taxable income.

These losses will be quarantined until such time to offset the final capital gain on the disposal of that asset.

Taxing distributions to adult beneficiaries of discretionary trusts, is designed to prevent the distribution of income to family members who have lower marginal tax rates.

This will be enacted via a new minimum tax rate of 30 per cent on all discretionary trust distributions made to adult beneficiaries from 1 July 2019.

Introduction of a new Investment Guarantee Scheme which would allow all businesses to immediately claim 20 per cent of the cost of eligible depreciating assets in the first year of use.

Cash refunds from excess franking credits to be disallowed from 1 July 2019 and the reintroduction of non-refundable tax offset whereby franking credits that exceed a taxpayer’s liability would be forfeited. The Trustee of the Superannuation Fund may require financial advice in relation to current and future investments for the benefit of the members.

Removal of the tax deductibility of personal superannuation contributions (which have applied from 1 July 2017).

This infers, the “10% rule” could be reinstated, forcing employee to utilise salary packaging or forgo the deduction.

Reduction to the non-concessional contributions cap from its current level of $100,000 to $75,000, unclear whether the bring forward arrangement will still be available.

Reintroduction of the prohibition on direct borrowing by Self Managed Superannuation Funds (SMSFs) for property investments.

This will effectively remove the current ability to use limited recourse borrowing arrangements. Existing arrangements may be grand-fathered.

Removal of the current freeze in the increase in the Superannuation Guarantee (SG) rate which was originally proposed to progressively increase to 12 per cent by 1 July 2025.

Should you wish to discuss any of the proposed changes and the potential impact on you and your business, please do not hesitate to contact us.

— Dani Di Blasio Partner, Murdoch Partners PH: +61 3 9854 8999

This claim would be in addition to the normal depreciation claim available. For example, an asset costing $1 million with an effective life of 10 years would allow a first-year claim of $280,000 ($200,000 upfront + $80,000 being first year depreciation of the balance over 10 years).

Measures to increase personal income tax rates including winding back recently introduced personal tax cuts from 1 July 2019 and reinstating the 2% budget repair levy which ceased on 30 June 2017 for a further 4 years.

A cap of $3,000 is to be applied to individuals in claiming deductions for managing their tax affairs.

This may have a significant impact where an individual has complex tax affairs (i.e. complex CGT calculation, PSI issues, termination of employment or trust distributions involving capital gains or streaming, etc.).

It is currently unclear how this cap would specifically apply including whether there is a carve out for non-taxation fees (i.e. preparation of financial reports) and whether the cap would apply to sole traders reporting business income and expenses;

The information provided in this article is general in nature and does not constitute tax advice. We recommend that you seek advice from your tax professionals.

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REA Buyer Journey Consumer Research Property Market Sentiment In the next 12 months, do you expect the property market in your state to be better or worse than now?

Attitudes towards interest rates What impact have recent increases in interest rates made on your decision to buy/build a new property?

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Benefits buyingoff off the plan Benefits to to buying off the plan offthe theplan plan

buying Benefits to buying Benefits to Benefits buying off theto plan

40%

Modern features

Modern features Modern features Modern features

Modern features Cost savings Cost savings Cost savings Cost Cost savings savings Flexibility to choose floor plan Flexibility to choose floor plan Flexibility to choose floor Flexibility Flexibility to choose plan tofloor choose floor plan plan No one else has lived there No one else has lived there No one else has lived there No has one lived else has lived there No one else there Customised finishes/fittings Customised finishes/fittings Customised finishes/fittings Customised finishes/fittings Customised finishes/fittings Additional time to save money Additional time to save money Additional Additional time time to to save save money money AdditionalReduced time to save money repairs/maintenance Reduced repairs/maintenance Reduced repairs/maintenance Reduced repairs/maintenance Meeting current safety standards Reduced repairs/maintenance Meeting current safety standards Meeting Meeting current current safety safety standards standards Energy efficient/sustainable features Meeting current safety standardsfeatures Energy efficient/sustainable Energy efficient/sustainable Energy efficient/sustainable features features Afford more for budget Afford features more for budget Energy efficient/sustainable Afford more more for for budget budget Afford Builder guarantee Builder guarantee Afford more for budget Builder guarantee Builder guarantee Tax deductions for depreciation Tax deductions for depreciation Tax deductions deductions for depreciation depreciation Builder guarantee Tax for Locking in current market price Locking in current market price Locking in current market Tax deductions forindepreciation Locking current market price price Latest products/technologies Latest products/technologies Latest products/technologies products/technologies Latest Locking in current market price No benefits No benefits No No benefits benefits

3% 3% 3% 3%

Latest products/technologies No benefits

35% 35% 35% 35% 35% 35% 35% 35% 35% 35% 32% 32% 32% 32% 32% 31% 31% 31% 31% 31% 31% 31% 31% 31% 30% 31% 30% 30% 30% 30% 30% 30% 30% 30% 29% 30% 29% 29% 29% 29% 29% 29% 29% 29% 29% 29% 29% 29% 29% 26% 26% 26% 29% 26% 26% 26% 26% 26% 26% 25% 25% 25% 25% 26%

40% 40% 40%

#1 #1#1 #1 #1 #2 #2 #2 #2#2 #3 #3 #3 #3#3

Cost savings Cost savings Cost savings Cost Cost savings savings Modern features Modern features Modern features Modern features Modern features Flexibility to choose floor plan Flexibility to choose floor plan Flexibility to floor plan Flexibility to choose Flexibility to choose choose floor floor plan plan

Upsizers

#1 #1 #1 #1#1 #2 #2 #2 #2 #3#2 #3 #3 #3

Builder guarantee Builder guarantee Builder guarantee Builder guarantee Builder guarantee Modern features Modern features Modern features Modern features Modern features Reduced repairs/maintenance Reduced repairs/maintenance Reduced Reduced repairs/maintenance repairs/maintenance

Downsizers Downsizers Downsizers Downsizers

#1 #1 #1 #1 #2#1 #2 #2 #2 #3 #3#2 #3 #3

No one else has lived there No No one one else else has has lived lived there there Meeting current standards No one else safety has lived there Meeting current safety standards Meeting current Meeting current safety safety standards standards Energy efficient/sustainable features Energy efficient/sustainable Meeting current safety features standards Energy features Energy efficient/sustainable efficient/sustainable features

#1#3 #1 #1 #1 #2 #2 #2 #2#1 #3 #3 #3 #3#2

Modern features Energy efficient/sustainable features Modern features Modern features features Modern Flexibility to choose floor plan Flexibility to choose floor plan Flexibility tofeatures choose floor floor plan plan Modern Flexibility to choose Reduced repairs/maintenance Reduced repairs/maintenance Reduced repairs/maintenance Reduced repairs/maintenance Flexibility to choose floor plan

40% First Home First Home Buyers First Home First Home First Home Buyers Buyers Buyers Buyers

Upsizers Upsizers Upsizers Upsizers

#3 NoReduced repairs/maintenance one else has lived there

Downsizers

Investors Investors Investors Investors

25% Investors

3%

#3

Reduced repairs/maintenance

Barriers to buying off the plan

Barriers to buying off the plan Barriers Barriers to buying off the plan Barriers to to buying buying off off the the plan plan Barriers to buying off the plan

Unexpected costs/going over budget Unexpected costs/going over budget Unexpected costs/going over budget

Unexpected over budget Unexpected costs/going costs/going over budget Funding the purchase Funding the purchase Funding the purchase Funding the purchase purchase Funding the Finding right size/configuration Finding right size/configuration Finding right size/configuration Finding size/configuration Finding right size/configuration Stress right throughout the process Stress throughout the process Stress throughout the process Stress throughout the Stress throughout the process process Finding the right development Finding the right development Finding the right development Finding the right development development Finding right Time to the complete and move in Time to complete and move in Time complete and in Time to complete and move inmove Time to complete andto move in Notto knowing what expect Not knowing what to expect Not knowing knowing what to expect expect Not knowing what expect Not what to Market may to decline once built Market may decline once built Market may once built Market may decline decline once built Declines in capital growth Market may decline built Declinesonce in capital growth Declines in capital growth Declines ingrowth capital growth Gauging the quality of the development Declines in capital Gauging the quality of the development Gauging the quality qualitynumber of the the development development Gauging of Overwhelmed of decisions Gauging the qualitythe of theby development Overwhelmed by number of decisions Overwhelmed number decisions Overwhelmed by number of of decisions Potential forby apartment oversupply for apartment oversupply OverwhelmedPotential by number of decisions Potential for apartment oversupply Potential apartment oversupply Can'tfor see the finished product Can't see the finished product Potential for apartment oversupply Can't seeover the finished product product see the finished Lack ofCan't control building process Lack of control over building process Can't see the finished product Lack control over building process Lack of ofDifficulties control over building process with the developer Difficulties with the developer Difficulties with the developer over building process Lack of control Difficulties with the Difficulties in renting outdeveloper property Difficulties in renting out property Difficulties in renting outdeveloper property Difficulties without the developer Difficulties in renting out property Finding about the Finding out about the developer Finding outout about the developer developer Finding out about the Lack of communication with Difficulties in renting property Lack of communication with developer Lack of communication communication withto developer Lack of with developer Potential for project not proceed FindingPotential out about developer for the project not to proceed Potential for project projectduring not to to the proceed Potential for not proceed Living elsewhere build Lack of communication with developer Living elsewhere during the build Living elsewhere elsewhere during during the the build build Living

47% 47% 47% 47% 39% 47% 39% 39% 39% 39% 36% 36% 36% 36% 36% 36% 36%36% 36% 36% 33% 33% 33% 33% 33% 32% 32% 32% 32% 32% 31% 31% 31% 31%31% 31% 31% 31% 31% 28% 31% 28% 28% 28% 26% 28% 26% 26% 26% 26%26% 26% 26% 25% 26%25% 25% 25% 24% 25%24% 24% 24% 24% 24% 24%24% 24% 24% 24% 24%23% 24% 23% 23% 24% 23% 21% 21% 21% 21% 19% 23% 19% 19% 19% 19% 21%19% 19% 19% 19% 18% 18% 18% 18%

Potential for project not to proceed

19%

Living elsewhere during the build

18%

#1 #1 #1 #1 #1 #2 #2 #2 #2 #2 #3 #3 #3 #3 #3

Unexpected costs/going over budget Unexpected costs/going budget Unexpected costs/going over over budget Unexpected costs/going costs/going over over budget budget Unexpected Funding the purchase Funding thethe purchase Funding purchase Funding the purchase purchase Funding the Finding the right size/configuration Finding the right size/configuration Finding the right size/configuration Finding Finding the the right right size/configuration size/configuration

Upsizers

#1 #1 #1 #1 #1 #2 #2 #2 #2 #2 #3 #3 #3 #3

Finding the right development Finding the right development Finding the right development Finding right development Finding thethe right development Unexpected costs/going over budget Unexpected costs/going over budget Unexpected costs/going over budget Unexpected costs/going over over budget Unexpected costs/going budget Finding the right size/configuration Finding the right size/configuration Finding the right size/configuration Finding the right size/configuration

Downsizers Downsizers Downsizers Downsizers

#1 #1 #1 #1 #1 #2 #2 #2 #2 #3 #2 #3 #3 #3

Finding the right size/configuration Finding the right size/configuration Finding the the right right size/configuration size/configuration Finding Finding right size/configuration Finding thethe right development Finding the right development Finding the right development Finding the right development Unexpected costs/going over budget Finding the right development Unexpected costs/going over budget Unexpected costs/going costs/going over over budget budget Unexpected

#3 #1 #1 #1 #1 #2 #2 #1 #2 #2 #3 #3 #2 #3 #3

Unexpected costs/going budget Unexpected costs/going over over budget Unexpected costs/going over budget Unexpected costs/going costs/going over over budget budget Unexpected Funding the purchase Funding the purchase Unexpected costs/going over budget Funding the purchase purchase Funding the Market decline once built Market decline once built Funding theonce purchase Market decline once built Market decline built

First Home

First Home Home First Buyers First Home First Home Buyers Buyers Buyers Buyers

Upsizers Upsizers Upsizers Upsizers

Downsizers

Investors Investors Investors Investors

Investors

#3

#3

Finding the right size/configuration

Market decline once built

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REA Buyer Journey Consumer Research What do do buyers look projects?

What buyers lookfor forwhen when shortlisting shortlisting shortlisting projects? shortlisting projects? projects?

What do look for What do buyers look forbuyers when shortlisting What do buyers look projects? for when when Price of apartments Price of apartments Price of apartments Price apartments Location ofof development Price of apartments of development Location Location of development Location of development development Access to public transport Location of totransport public transport Access toAccess public Access to transport Developer's Access to public publicreputation transport Developer's reputation Developer's reputation Developer's reputation Capital growth Developer's reputation Capital growth Capital designs growth Capital growth Selection of apartment Capital growth Selection of apartment designs of apartment designs Selection Selection of Ability apartment designs to display suites Selection of view apartment designs Ability to view display suites Ability to view view suites display suites Ability to to Ability view apartments to display suites Ability viewcompleted display Ability to view completed apartments Ability to to view completed apartments of view apartments in development Ability completed apartments Ability to Number view completed apartments Number of apartments in development Number of in development word of mouth of apartments apartments in development Number ofNumber apartments inPositive development Positive word of mouth Positive word of of mouth Amenities available Positive word mouth Positive word of mouth Amenities available Ability to customiseAmenities apartmentavailable designs Amenities available Ability to customise apartment Amenities availabledesigns Ability Inclusions designs offered Ability to to customise customise apartment apartment designs Inclusions offered Ability to customise apartment designsfeatures Inclusions offered Sustainable Inclusions offered Sustainable features Inclusions offered Sustainable features Builder's qualifications and features licenses Sustainable Builder's qualifications and licenses Builder's qualifications and licenses licenses Sustainable features Development height Builder's qualifications and Development height Development height Builder's qualifications and licenses Large national developer Development height Large national developer Large national developer Average rental prices Largeweekly national developer Development height Average weekly rental prices Average weekly rental prices Potential rental rental yield/return weekly prices LargeAverage national Potential developer rental yield/return Potentialwith rental yield/return Offers assistance obtaining loan Potential rental yield/return Average weekly rental prices Offers assistance with obtaining loan Offers assistance assistance with of obtaining loan Number awards won Offers with obtaining loan Number of awards won Potential rental yield/return NumberSomething of awards awards won won else Number of Something Offers assistance with obtaining loan else Something else Something else Number of awards won Something else 1%

1% 1% 1% 1%

shortlisting projects?

57% 57% 57% 47% 57% 57% 47% 47% 47% 42% 47% 42% 42% 36%42% 42% 36% 36% 36% 34% 36% 34% 34% 34% 32% 34% 32% 32% 32%32% 32% 32% 32% 32% 32%31% 31% 31% 31% 31% 31% 31% 28% 31% 31% 28% 28% 28% 28%28% 28% 27% 28% 28%27% 27% 27% 27% 27% 27%25% 27% 27% 25% 27%25% 25% 25% 25% 25% 25% 20% 25% 20% 20% 25% 20% 20% 20% 20% 20%19% 19% 19% 18% 19% 20%18% 18% 18% 19%17% 17% 17% 14% 17% 14% 18% 14% 14%

#1 #1#1 #1 #1 #2 #2 #2 #2 #2 #3 #3 #3 #3 #3

Price of apartments Price of apartments Price of apartments Price Price of of apartments apartments Location of development Location of development Location of development Location of development development Location of Access to public transport Access to public transport Access to public public transport Access to public transport Access to transport

Upsizers

#1 #1 #1 #1#1 #2 #2 #2 #2 #2 #3 #3 #3 #3

Capital growth Capital growth Capital growth Capital growth Capital growth Price of apartments Price of apartments Price of of apartments Price Price apartments of apartments Location of development Location of development Location of of development development Location

Downsizers Downsizers Downsizers Downsizers

#1 #1 #1 #1 #2 #1 #2 #2 #2 #3 #2 #3 #3 #3

Price of apartments Price of apartments Price Price of of apartments apartments Location ofapartments development Price of Location of development Location Location of of development development Number of apartments in development Location of development Number of apartments in development Number of apartments Number of apartments in in development development

First Home

First Home First Home Buyers First Home First Home Buyers Buyers Buyers Buyers

Upsizers Upsizers Upsizers Upsizers

Downsizers

Investors Investors Investors Investors

17% 14%

Investors

#3

Location of development

#1#3 #1 #1 #1 #2 #2 #1 #2 #2

Price of apartments Number of apartments in development Price of apartments Price Price of of apartments apartments Location of development Location ofapartments development Price of Location Location of of development development Access to public transport/Average weekly =#3 Access to public transport/Average weekly rental price/Potential rental yield/return =#3 Access to transport/Average weekly to public public transport/Average weekly #2 Access Location of development rental price/Potential rental yield/return =#3 =#3 rental rental price/Potential price/Potential rental rental yield/return yield/return

=#3

Access to public transport/Average weekly rental price/Potential rental yield/return

Most popular project amenities

Most popular project amenities Most project amenities Most popular popular project amenities Most popular project amenities

Storage in car park Storage cages in car park cages 28% Storage cages in car park

NSW

Storage cages in car park Storage cages in car park BBQ, landscaped garden & deck BBQ, landscaped & deck BBQ, landscaped garden & deck garden BBQ, landscaped garden27% & deck BBQ, landscaped garden & deck NSW NSW Fully equipped gym NSW Fully equipped gym NSW gym Fully equipped 26% Fully equipped gym Fully equipped gym Storage cages in car park Storage cages in car park

Storage in car park Storage cages in car park cages 36% Storage cages in car park

BBQ, landscaped garden & deck BBQ, landscaped garden & deck

BBQ, landscaped garden & deck BBQ, landscaped & deck BBQ, landscaped garden & deck garden29% VIC

VIC

VIC VIC VIC

Indoor heated pool Indoor heated pool Indoor heated pool

Indoor heated poolIndoor heated pool

27%

51% 51% 51% 51% 41% 41% 41% 41% 28% 28% 28% 28%

Outdoor pool & sundeck BBQ, landscaped garden28% & deck

29% 29% 29% 29% 28% 28% 28% 28% 24% 24% 24% 24%

BBQ, landscaped garden & deck BBQ, landscaped garden & deck BBQ, landscaped garden & deck Outdoor pool & sundeck Outdoor sundeck BBQ, landscaped garden & pool deck& Outdoor pool & sundeck29% Outdoor pool & sundeck WA WA Storage cages in car park Storage cages in car park Outdoor WA pool & sundeck 28% WA Storage cages in car park Storage cages in car park

WA

14

36% 36% 36% 36% 29% 29% 29% 29% 27% 27% 27% 27%

BBQ, landscaped garden & deck BBQ, landscaped garden & deck BBQ, landscaped garden & deck BBQ, landscaped garden & deck 51% Fully equipped gym Fully equipped gym Fully equipped gym QLD pool & sundeck QLD Fully equipped gymOutdoor Outdoor pool & sundeck41% QLD Outdoor pool & sundeck QLD Outdoor pool & sundeck

BBQ, landscaped garden & deck gym Fully equipped

QLD

28% 28% 28% 28% 27% 27% 27% 27% 26% 26% 26% 26%

Storage cages in car park

24%

32% 32% 32%

Fully equipped gym Fully equipped gym Fully equipped gym

Fully equipped gym Fully equipped gym BBQ, landscaped garden BBQ, landscaped BBQ, landscaped garden &garden deck BBQ, landscaped garden First Home BBQ, landscaped garden First Home First Home First Outdoor pool & sundeck Home Buyers Outdoor pool & sundeck First Home pool Buyers Outdoor & sundeck Outdoor pool & sundeck Buyers Buyers Outdoor pool & sundeck Buyers

& & & &

deck deck deck deck

30% 26% 26%

26% 26% 26%

36% 36%

Outdoor pool & sundeck Outdoor pool & sundeck

Outdoor pool & sundeck Outdoor pool & sundeck Outdoor pool & sundeck

Upsizers

32% 32%

30% 30% 30% 30%

BBQ, landscaped garden & deck BBQ, landscaped garden & deck BBQ, landscaped garden & deck BBQ, landscaped BBQ, landscaped garden &garden deck & deck Upsizers 24-hour concierge Upsizers 24-hour concierge Upsizers 24-hour concierge Upsizers 24-hour concierge

24-hour concierge

36% 36% 36% 29% 29%

29% 29% 29% 27% 27%

27% 27% 27%

Storage cages in car park Storage cages in car park Storage cages in car park Storage cages in car park

Storage cages car park garden & deck 51% BBQ, in landscaped BBQ, landscaped garden & deck

Downsizers

BBQ, landscaped garden & deck BBQ, landscaped garden & deck Downsizers Outdoor pool & sundeck Downsizers BBQ, landscaped & deck Outdoorgarden pool & sundeck Downsizers Outdoor pool & sundeck Downsizers Outdoor pool & sundeck

Investors

28% 29% 29%

Outdoor pool & sundeck Storage cages in car park

Storage cages in car park Storage cages in car park Storage cages in car park BBQ, landscaped garden & BBQ, landscaped & Storage cages car park garden BBQ, in landscaped garden & BBQ, landscaped garden & Investors Investors Indoor heated pool Indoor heated pool Investors BBQ, landscaped garden & deck Investors Indoor heated pool Indoor heated pool

Indoor heated pool

41%

51% 51% 51% 51% 41% 41% 41% 41% 28% 28% 28% 28%

deck deck deck deck

29% 29% 28% 29% 28% 28% 28% 24% 24% 28% 24% 24%

24%

Amenities buyers would be buyers would Amenities buyers would AmenitiesAmenities buyers would beprepared to pay extrabe for Amenities buyers would be prepared to pay extra for be prepared prepared to prepared to to Car space

pay pay extra for pay extra extra for for 45%

Car space Car space Car Home automation 40% Car space space Home automation Home automation Home automation Furniture package 31% Home automation Furniture package 31% Furniture package 31% Furniture 31% Furniture package package 31% Upgraded Upgraded floor coverings 30% floor coverings 30% Upgraded floor coverings 30% Upgraded floor floor coverings coverings 30% Upgraded 30% Upgraded kitchen appliance package package 29% 29% Upgraded kitchen appliance Upgraded kitchen appliance package 29% Upgraded 29% Upgraded kitchen kitchen appliance appliance package package 29% Upgraded kitchen benchtop 29% Upgraded kitchen benchtop 29% Upgraded kitchen benchtop 29% Upgraded kitchen kitchen benchtop benchtop 29% Upgraded 29% on-floor storage Additional Additional on-floor storage 27% 27% Additional on-floor storage 27% Additional 27% Additional on-floor on-floor storage storage 27% Built-in cabinetry 24% Built-in cabinetry Built-in cabinetry 24% 24% Built-in cabinetry 24% Built-in cabinetry 24% Fireplace 22% FireplaceFireplace 22% 22% Fireplace 22% Fireplace 22% Additional basement storage 20% Additional basement storage 20% Additional Additional basement storage basement storage 20% 20% Additional basement storage 20% Wine fridge in apartment 15% Wine fridge in apartment 15% Wine fridge in in apartment apartment Wine fridge in apartment 15% 15% Wine fridge 15% Additional oven 10% Additional oven 10% Additional oven 10% Additional oven 10% 10% Additional oven Wine storage rack in basement 9% Wine storage rack in basement 9% Wine storage storage rack rack in in basement basement 9% Wine Wine storage rack in basement Something else 9% 2% 9% Something else 2% Something else 2% Something else 2%

Something else

Car space

45% 45% 45% 45% 40% 40% 40% 40%

First Home First Home Buyers First Home Buyers First Home First Home Buyers Buyers Buyers

Upsizers Upsizers Upsizers

Upsizers Upsizers

40%

Car space Car space Car Home automation Car space space Home automation Home automation Home automation Home automation Furniture package Furniture package Furniture package Furniture package Furniture package

40% 40% 40% 40%39% 39% 39% 39% 39%37% 37% 37% 37% 37%

Car Car space space

46%46% 46% 46% 46% 38%38% 38% 38% 38% 31% 31% 31% 31% 31%

Car space Car space space Car Home automation Home automation Home automation Home automation automation Home Furniture package Furniture package Furniture package Furniture package package Furniture

Upgraded floor coverings 58% 58%58% Upgraded floor floor coverings coverings 58% Upgraded 58% Upgraded kitchen appliance package 54% Upgraded kitchen appliance package 54% Upgraded kitchenappliance appliance package54%54% Upgraded kitchen Upgraded kitchen appliance package package 54% Upgraded kitchen benchtop 52% Upgraded kitchen benchtop 52% Upgraded kitchen benchtop 52% Upgraded kitchen benchtop Upgraded kitchen benchtop 52%52%

Upgraded floor Upgraded floorcoverings coverings

Downsizers Downsizers

Downsizers Downsizers Downsizers

Car space Car space

Car space Car Car space space Investors Investors Investors Investors

Investors

2%

Home automation Home automation Home automation Upgraded floor coverings Upgraded floor coverings Upgraded Upgraded floor floor coverings coverings

Home automation Home automation

Upgraded floor coverings

48% 48% 48% 48%48% 42% 42% 42% 42%42% 30% 30% 30% 30%

30%

Appeal of sustainable features Appeal of sustainable features

Appeal of sustainable features

Appeal Appeal of of sustainable sustainable features features 5-star energy rating 5-star energy rating

59% 59%

5-star energy rating 5-star 5-star energy energy rating rating

59% 59% 59%

Noisetechnology cancelling technology Noise cancelling

54% 54%

Noise cancelling technology Noise Noise cancelling cancelling technology technology

54% 54% 54%

Solar power powering theareas common areas Solar power powering the common Solar power powering the common areas

51% 51% 51%

Solar Solar power power powering powering the the common common areas areas

Green common areas in Green common areas in Green common areas in building Green Green common common areas areas in in

51% 51%

building building building building

41%

Water harvesting features

40%

Water harvesting features Water harvesting Water harvesting Water features harvesting features features

40% 40% 40% 40%

Resident vegetable garden Resident vegetable garden

Resident vegetable Resident vegetable Residentgarden vegetable garden garden

31%

Share car facilities for residents Share car facilities for residents Share car facilities facilities for residents Share car for residents Share car facilities for residents Electric car charging points Electric car charging points Electric car car charging charging points points Electric

Electric car charging points

None of these None of these None of of these None these

None of these

4%

41% 41% 41% 41%

26%

4% 4% 4% 4%

25%

31% 31% 31% 31%

26% 26% 26% 26% 25% 25% 25% 25%

5-star energy 5-star energyrating rating

5-star energy rating 5-star 5-star energy energy rating rating Noise cancelling Noise cancellingtechnology technology Noise cancelling technology Noise cancelling technology Home FirstFirst Home Noise cancelling technology First Home Green commonareas areas in in building Buyers common building First Home Green Buyers Green common areas in building First Home Buyers Green common areas Buyers Green common areas in in building building Buyers 5-star energy rating 5-star energy 5-star energyrating rating 5-star 5-star energy energy rating rating Noise cancelling technology Noise cancellingtechnology technology Noise cancelling Noise Noise cancelling cancelling technology technology Upsizers Electric car charging points Upsizers Upsizers Electric car charging points Upsizers car charging points Upsizers Electric Electric Electric car car charging charging points points 5-star energy rating 5-star energy rating

5-star energy rating 5-star energy 5-star energyrating rating

Noise cancelling technology Noise cancelling technology Noise cancelling cancelling technology technology Noise cancelling technology Downsizers Noise Solar power powering common areas Downsizers Solar power powering common areas Downsizers Downsizers Solar power power powering powering common common areas Downsizers Solar Solar power powering commonareas areas 5-star energy rating 5-star energy rating 5-star energy rating rating 5-star energy 5-star rating common areas Solarenergy power powering Solar power powering common areas Solar power power powering powering common common areas areas Solar Investors Noise cancelling technology Investors Solar power powering common areas Noise cancelling technology Investors Investors Noise cancelling technology Noise cancelling technology

Investors

Noise cancelling technology

54% 54% 54% 54% 54% 53% 53% 53% 53% 53% 50% 50% 50% 50% 50% 71% 71% 71% 71% 71% 51% 51% 51% 51% 51% 47% 47% 47% 47% 47% 86% 86% 86% 86% 86% 86% 86% 86% 86% 86% 81% 81% 81% 81%

81%

57% 57% 57% 57% 57% 54% 54% 54% 54% 52% 54% 52% 52% 52%

52%

15

REA Buyer Journey Consumer Research Importance of special offers

72%

63%

of buyers said special offers were important in their decision

of recent purchasers indicated that they had been offered a price rebate

Importance of special offers Most popular special offers

Importance Importance of of special special offers offers

Most popular special offers Most special Developer pays stamp duty Most popular popular special

offers Most popular special offers offers

55%

Free upgrades Developer pays stamp duty Developer pays stamp duty Developer pays stamp duty

46% 55% 55% 55%

Developer pays body corporate Free upgrades Free upgrades fees for 2 years Free upgrades

45% 46% 46% 46%

Developer pays body corporate Developer pays body corporate Price rebates Developer pays corporate body fees for 2 years fees for 2 years fees for 2 years Price rebates Price rebates Rental Guarantee period Price rebates

45% 43% 45% 45%

43%

43% 41% 43%

Rental Guarantee period Rental Guarantee period Free car Rental Guarantee period

41%

36%41% 41%

Free car

36% 36%

Free Guaranteed buy back after 12 car Free car months Guaranteed buy back after 12

36% 35%

Guaranteed buy back after 12 Guaranteed buy back months after 12 months Furniture voucher months Furniture voucher Furniture voucher Furniture voucher

35% 35%

35% 33%

Frequent Flyer points

24%

Frequent Flyer points Frequent Flyer points Frequent Flyer points

NoneNone of these of these None of these None of these

16

4%4% 4% 4%

24% 24% 24%

33% 33% 33%

58%

Developer pays stamp duty Price rebates Developer pays stamp duty

Developer pays stamp duty First Home Developer pays stamp duty Free upgrades with purchase Buyers First Home First Home First Home Buyers Buyers Buyers

Price rebates Price rebates Price rebates Free upgrades with purchase Developer pays stamp duty Free upgrades with purchase Free upgrades with purchase

58% 58% 58% 45% 45% 45% 43% 43% 43%

Free pays upgrades Developer stampwith duty purchase 49% Developer pays stamp duty 49% 49% Developer pays stamp duty Upsizers Free upgrades with purchase 49% Rental Guarantee period Free upgrades with purchase 49% Free upgrades with purchase 49% Upsizers Rental Guarantee period 42% Upsizers Rental Guarantee periodbody corporate42% Upsizers Developer for 2 Rental Guarantee pays period 42% years

Developer pays body corporate for 2 Developer pays body corporate for 2 Developer pays body corporate for 2 years yearsDeveloper pays stamp duty years Developer pays stamp duty Downsizers Developer pays stamp duty Developer stampwith duty purchase Free pays upgrades Downsizers Downsizers Free upgrades with purchase Downsizers Free upgrades with purchase Free upgrades with purchase

Developer pays stamp duty

Developer pays stamp duty Developer pays stamp duty Developer pays stamp duty Rental Guarantee period Rental Guarantee period Rental Guarantee period Rental Guarantee period Investors Investors Free upgrades with purchase Investors Free upgrades with purchase Free upgrades with purchase Investors Free upgrades with purchase

82% 82% 82% 81% 81% 81% 67% 67% 67% 51% 51% 51% 49% 49% 49% 45% 45% 45%

45% 43% 49% 49% 42% 82% 81% 67% 51% 49% 45%

The off the plan purchase journey

Length of Journey* Buyers are taking longer to make their decision

— Hall + Partners and realestate.com.au Buyer Journey Consumer Research conducted by Hall & Partners and realestate.com.au Pty Ltd in November 2018

17

Data and Technology in the Development

The development industry is always looking to use data and technology to improve efficiencies and lower costs. Maddocks partner and head of the firm’s development practice, Nick Holuigue, said a tightening in bank lending and a cooling property market had meant that developers needed to make their projects as financially airtight as possible. eContracts It was this drive from the development industry that has seen developers increasingly turn to electronic contracts as a way of cutting costs and time out of project timelines.

The leading development-specific electronic contracts platform in the Australian market is Maddocks eContracts. The platform launched in 2016, and Maddocks now processes over 30 percent of its projects using the platform. It was recognised by the industry last year, winning the Consultants Award at the UDIA Awards for Excellence for its use as part of the Woodlea project.

According to Mr Holuigue, the platform has been embraced by developers and agents looking for a better way to do contracts.

‘In talking to developers, what became clear was that they were looking for a system that was safe, cost effective but more importantly promoted greater accuracy at a greater speed,’ Nick said.

18

‘In this context, accuracy is about greater certainty in the data in the contract. The eContracts platform can only be completed once the right information has been entered and verified, as opposed to the paper version in which errors can go unchecked, causing delays in transactions down the track.’

‘When you have a system that does away with hundreds of paper files and replaces it with an electronic signature and a few clicks of the mouse then that is going to be popular,’ he said.

‘At a primary level the fact that you have so much paper taken out of the sales process is a huge cost saving, especially when you extrapolate that over multiple developments, and is also a huge environmental gain as well.’

Now well-established in the market, the platform has been used by several high-profile developers, including AVID, Blueways, Cedar Woods, Chinese developer Dahua Group, Fontic, ID_Land, Mirvac, Poly Global, Satterley and Woodlea.

The platform has also been supported by a range of agents and has the backing of major Australian banks.

Industry Mr Holuigue said the signoff from major banks such as ANZ and the Commonwealth Bank was significant, saying that the reason that it has gained the backing of major banks was because it is secure. For instance, contracts are encrypted and cannot be altered save for agreed fields.

Maddocks development team partner Bettina Sheeran said Maddocks eContracts was built specifically for developers and development projects.

‘Maddocks eContracts is not an off-the-shelf product,’ she said.

‘We spoke extensively with developers, agents and banks about what they would need to make such a platform work and we used that to develop the final product.’

Using Maddocks ePortfolio, developers can access data to identify trends, including in sales, settlements, extensions, nominations and special conditions. The platform also provides effortless FIRB reporting and a snapshot view of qualifying pre-sales against targets at any given time. The overall result is that the technology supports developers in making informed decisions and taking control over the success of their projects.

Ms Sheeran said Maddocks suite of evolving technology solutions fit in with what is a forward-thinking sector.

‘We are seeing such exciting change in the development sector across the world, from the use of new materials and new ways to build through to the use of tools such as virtual reality to sell lots.

‘We feel our technology offering fits in with this desire by the development sector to find new ways to build better, faster and more cost-effectively.’

developing market-leading technology products.’

Maddocks provides implementation and training as a way of ensuring clients get the most value out of the platforms, and the team will continue to invest in new ways to use technology to support their legal offering and deliver better and more efficient solutions to their clients.

Trends in legal portfolio management tools

To find out more about Maddocks eContracts or Maddocks ePortfolio, visit maddocks.com.au/econtracts or maddocks.com.au/eportfolio

The Maddocks team has also recently revamped their long-standing reporting platform, Maddocks ePortfolio. The new version provides developers with access via desktop and an app to intelligence at all stages of their projects.

— Nick Holuigue Partner, Maddocks Development PH: +61 3 9258 3865

‘This is very much a Maddocks product, one borne out of the experience we have attained over many years

Nick Holuigue said: ‘having been innovating for nearly 20 years in this space, we know that our developer clients are busy, often out at various sites, and so the creation of a mobile app to provide them with access to sales and settlement data anytime, anywhere was a key part of the Maddocks ePortfolio revamp’.

19

Five Minutes With...

Jian Zhou BHC Property

Who will win the upcoming Federal election and why?

Personally I think the Labor party will win. A hot topic for the election is housing affordability.

Labor adopt the method of banishing negative gearing to control property prices, which will resonate well with majority of the population. They have done exceptionally well using it as a tool to rally voters. This is especially effective and attractive to low income and low educated groups because it's easily understood and the effect of the change can be seen immediately.

It is every hard-working Australian’s dream to have their own property to call home. Although Australia’s prices have decreased, it is still largely unaffordable to majority of the population. Hence why Labor’s tactics will be well received.

Even though I want Liberal to win, I think Labor will end up taking the win.

What impact will that have on the off the plan market?

With the current bankingtand added Labor policy, the overall property market will continue a downward trend.

The benefit for investors to purchase existing properties is largely removed. We expect to see a decrease in investor interest in existing properties and shifting their focus to off the plan given the negative gearing incentives are still available to new homes.

Low income owner occupiers will have less motivation to buy off the plan, since existing homes could be purchased at relatively similar prices. However, one major attraction still available to low income home owners, is that the homes are brand new. There is still a market for those who chase lifestyle products. These products will most likely locate to the outer regions. One of Labor’s goals are to inject more funding to regional infrastructure, making outer regions more accessible and desirable to live.

There might still be opportunity for higher income owner occupiers to purchase something brand new. There could still be a market for luxury products within the inner/middle regions.

How long do you see the current market conditions prevailing?

We are unsure how long this winter will last. However, we see that median property prices will continue on a downward trend until it reaches the stage where demand is higher than supply, or a policy change from the banks or government gives the market an upward push.

20

What adaptations have you made to your business to adjust to the market?

• • • •

Build to rent Focus more on the management side of business Focus more luxury or lifestyle products in the outer regions We may explore opportunities in other sectors such as commercial or retail – shopping centres etc

Are you buying or selling sites during 2019?

We won’t be selling any sites in 2019. We see this as an opportunity to secure desirable sites. So we will be keeping an eye out to buy.

Danny Ciarma Urban DC

Who will win the upcoming Federal election and why?

How long do you see the current market conditions prevailing?

Labor should win the up-coming election. This will be due to the average person on the street experiencing a higher cost of living and wage stagnation. In real terms wages actually going backwards. Because of this the average person is disillusioned with the current government.

The current slowdown has clearly been induced by the banking system and I believe the fundamentals of property are still there. Values did however, reach a height that I believe a breather in the market is to be welcomed. It is a good thing that the market is resetting.

In times like this, I think people swing to Labor due to their promise of cash handouts, higher min wage settings and cash handouts.

You cannot have an environment where there is a reduced supply (as evident by the crane index), population increasing (Melbourne alone is currently taking in around 120,000 people per annum), interest rates at record lows and strong employment with property growth not occurring.

What impact will that have on the off the plan market?

If Labor wins, and they implement their proposed negative gearing and capital gains tax legislation (ie: remove negative gearing from established property and maintain it on new property, whilst halving Capital Gains Tax CGT to 25% on all property), I think there will be little impact. In fact, what I foresee is potentially an increase in demand for off the plan sales, which is what Labor’s legislation is designed to do (ie: maintain construction jobs). This will conversely subdue established property prices as investors focus more on purchasing off the plan sales (which is what Labor is hoping to achieve, to fix the affordability issues on established housing). However, there are market groups such as the UDIA that are suggesting this could be short lived as investors will realise that once their off the plan property is purchased, it will be classed as established property and the negative gearing tax benefits will not flow through to the next purchaser once sold. This could subdue the future values/buying appetite of their property that was initially purchased off the plan.

If Labor win, they will try to implement this legislation at the end of the year, so this may bring on a rush for off the plan sales as investors will want to purchase before the implementation date in order to get the grandfathering benefits.

Having said all of this, I have strong faith in residential property. I believe that once the dust settles, investors and owner occupiers of off the plan and established property will get on with the business of investing in residential property. The focus will be on the underlying benefit; a safe investment that will enjoy long term demand and growth.

Subject to banks easing their lending policies, which I believe they will need to, I believe the investor market will return in 12-18 months.

What adaptations have you made to your business to adjust to the market?

I am in a fortunate position as I have just completed two great projects (No. 308 Carlisle St, Melbourne and 551 Darling Street, Sydney) and have presold and started construction on No. 818 Caulfield Residences.

I also have three sites in planning, so I’m not currently in a sales campaign whilst the market is subdued. Having said this, the top end down-sizer market is still alive so I am hopeful that one of my projects, in particular gets a permit during the course of this year, so I can launch it.

Whilst my projects are in planning, I am investing in other market sectors outside of residential.

Are you buying or selling sites during 2019?

I am not selling any of my sites at the as they are great sites with huge potential for residential and hotel use. I am more of a buyer this year and I predict that there will be some buying opportunities later in the year for development sites, which I’m holding out for.

Governments often bring in new legislation that affects the market performance/value of property in the short term but the market adjusts, such as when GST was introduced. Also, with the abolishment of stamp duty savings for off the plan sales, I still believe this will not impact sales.

NSW has not had stamp duty exemptions and its off the plan market has thrived in recent times.

Property will be assessed and valued by the market on the true indicators of supply/demand, interest rates and employment. When all these measures are right, property will continue to be sought after.

21

Five Minutes With...

Robert DiCintio Trenerry Property Group

Nolan Stevens Buxton Group

Who will win the upcoming Federal election and why?

Who will win the upcoming Federal election and why?

ALP are favourites but it is too close to call. The NSW election result clearly shows that LNP are in with a very strong chance.

I think you have to go with the pollsters and it looks like it will be a Labor government.

What impact will that have on the off the plan market?

What impact will that have on the off the plan market?

If ALP win, I think there will be a significant refocus on buying off the plan as the ALP’s negative gearing policy favours off the plan residential property.

In previous years the lead up to any election has always created uncertainty and we find that a segment of buyers will sit on their hands until the uncertainty is removed. With the talk of significant changes to property taxation mooted by the Labor government we believe this uncertainty may continue long after the election if Labor get in until we understand what their intentions are.

How long do you see the current market conditions prevailing?

Sentiment is unreasonably low for residential property at the moment.

Apartments most especially.

I think there has never been a better time to purchase well-located and well-designed apartments in premium developments. The simple reason being that construction is in decline. This means a reduction in supply, despite very strong population growth and a very buoyant rental and employment market, whilst interest rates are expected to remain low. Buy well designed and well located apartments in premium developments which could deliver 4.5% plus yields, capital growth whilst enjoying a safer and better lifestyle living experience.

What adaptations have you made to your business to adjust to the market?

None. Trenerry Group has never been about volume. We develop with passion. Creating beautifully designed apartments in amazing locations with lifestyle enhancing amenity.

We are about quality not quantity.

We are about developing places, not buildings!

Are you buying or selling sites during 2019?

Trenerry Group is extremely bullish about residential apartment living as offering the safest set and forget lifestyle decision.

We are purchasers in 2019 and beyond!

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How long do you see the current market conditions prevailing?

Market conditions are always evolving and whilst a lot of buyers (and sellers) will wait it out, whilst there is uncertainty, there is always a segment of the market which sees value and continues to move to accomodate their current requirements.

What adaptations have you made to your business to adjust to the market?

We are constantly refining our business, however we feel our conscious decision to focus on the owner-occupier market will stand us in good stead through the current market conditions and ride with it as it recovers.

Are you buying or selling sites during 2019?

We still have an appetite for quality sites and will continue to look to acquire through all markets if the right opportunity comes along.

Nigel Hunt McLaren Property Developments

Who will win the upcoming Federal election and why?

Hopefully Liberal so Labor don’t get the opportunity to waste more of tax payers funds.

What impact will that have on the off the plan market?

Who knows. I think the greatest concern is Labor's position on Franking credits.

How long do you see the current market conditions prevailing?

Hopefully if the press can stop barraging the real estate market it should lift. I also believe that there is still a shortage of housing. The fact that so many projects are not proceeding due to banks not lending,

this shortage should therefore drive markets up, or at least maintain the current rates per sqm. Obviously I would prefer an increase.

What adaptations have you made to your business to adjust to the market?

I haven’t. I don’t read the news and don’t listen to what others are doing. When it gets tough that’s the time to go harder in my opinion.

Are you buying or selling sites during 2019?

Both, always bullish.

McLaren DEVELOPMENTS

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Past Project Profile

Luar 22-24 Pakington Street St Kilda

Bloom 1240-1248 Glen Huntly Road Carnegie

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Type

No.

% of Total

Average Size per m2

Average Price per m2

Average Price

1 Bed + Flexi, 1 Bath

2

6

57.0

$8,991

$512,500

2 Bed, 2 Bath

28

85

76.9

$9,356

$719,161

3 Bed, 2 Bath

3

9

101.3

$9,543

$961,333

Type

No.

% of Total

Average Size per m2

Average Price per m2

Average Price

1 Bed, 1 Bath

34

30

50.7

$8,149

$413,029

2 Bed, 1 Bath

9

8

66.8

$8,423

$562,444

2 Bed, 2 Bath

55

49

68.9

$8,506

$585,745

3 Bed, 2 Bath

14

13

93.1

$8,652

$805,036

Past Project Profile

Balmoral 1571-1573 Malvern Road Glen Iris

Emerald Grove 66 Stanley Road Keysborough

Type

No.

% of Total

Average Size per m2

Average Price per m2

Average Price

2 Bed, 1 Bath

1

4

65.5

$10,458

$685,000

2 Bed, 2 Bath

9

39

76.5

$10,415

$796,333

3 Bed, 2 Bath

7

30

118.4

$10,523

$1,246,429

3 Bed, 2 Bath + PR

6

26

142.5

$10,528

$1,505,000

Type

No.

% of Total

Average Size per m2

Average Price per m2

Average Price

2 Bed

3

13

138.5

$4,593

$636,000

3 Bed

20

87

180.0

$4,909

$876,050

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