Spotlight

Mark Dayman

Director

Since the creation of Marshall White Projects in 2013, Mark has lead a dedicated project marketing team that has sold literally thousands of new ‘off the plan’ apartments or townhouses. He has a wealth of knowledge and experience accumulated in nearly 30 years in the industry.

“The opportunity to be involved in every aspect of a sales and marketing campaign means that I can take full ownership of helping our clients achieve the best yield, not just the best price with reduced days on market. In the end it’s all about giving our developer clients a competitive edge in the selling process.”

In his spare time, Mark enjoys spending time down at the coast with his wife Sam and four daughters and supporting his beloved Adelaide Crows.

Leonard Teplin

Director

Having grown up in South Africa and then spent several years in Portugal, Leonard has developed an instinctive appreciation for the diversity of inner Melbourne communities and housing styles.

Known for his ability to create sales at the highest level, over the last decade Leonard has been involved in some of Melbourne’s most iconic and successful off the plan residential developments.

Leonard’s extensive experience in the real estate industry and particular expertise in the inner urban residential property market, has seen him in demand with some of Australia’s largest public and private companies. His strength in establishing a global agent and referral partner network has set him apart, connected to the best developers and builders in Melbourne. Leonard enjoys managing his clients projects from inception to completion.

Leonard enjoys many interests including sport, history and travel. Leonard also enjoys fund-raising activities with both Marshall White and his wife Leisa.

Ranko Cvjeticanin

Director

With over twenty years of real estate experience, Ranko has a proven track record of achieving outstanding sales results in the industry. During this time period, Ranko has seen substantial change in the real estate profession but his professional approach to every facet of every transaction hasn’t wavered.

Part of the project development team at Marshall White, Ranko’s natural positive energy and enthusiasm and ability to relate to people from all walks of life has been invaluable. His genuine integrity and personal service style quickly makes clients feel at ease.

Balance has always been and continues to be crucial to Ranko’s consistency throughout his career. Away from the office he spends time with his son and family and he is dedicated to keeping fit and physically active.

488 Barkers Road, Hawthorn East

Project Carrington Hill

101 Carrington Road, Box Hill

Project Chapel Park

220 Chapel Road, Keysborough

Project Chevron One

Project Ascot Place

9 Newsom Street, Ascot Vale

Project Walmer

649 Victoria Street, Abbotsford

Project Soligo

Project Cascade

40 Whitehorse Road, Blackburn

The Melbourne suburbs with the largest price gap between houses and units

Written by Rachel Wells, Domain, www.domain.com.au

The price gap between Melbourne houses and units has widened over the past year, and experts expect it will grow further while international borders remain closed and immigration is at a standstill.

Melbourne’s median house price – which hit a record high of $936,073 in the December quarter – is now 64 per cent higher than the unit median of $569,677, which also reached a new high in December, according to the latest Domain House Price Report.

In some of Melbourne’s most affluent suburbs, the price gap between houses and units is far greater. In Toorak, for example, it will cost $3.2 million to upgrade from an apartment to a house and in Brighton, you would need to find an additional $1.9 million to upsize to a house.

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Buyer’s advocates and real estate agents say the widening gap between houses and units, which largely reflects a decline in investor activity in the city’s apartment market, presents a good opportunity to buy, especially for owner-occupiers, who aren’t relying on rental income to help pay the mortgage.

Prior to the pandemic, unit prices were growing at a faster rate than houses, with 12.2 per cent growth over 2019, compared to 8.7 per cent for houses.

However, last year Melbourne houses outperformed units, with house prices growing by 3.9 per cent in 2020, compared to apartments, which grew by 2.5 per cent. In the last three months of last year, house prices increased by 5.3 per cent, compared to 4.4 per cent for units.

Domain senior research analyst Nicola Powell says she expects the gap between houses and units to continue to grow this year on the back of the pandemic, which has led to an increase in remote working and seen many inner-city dwellers seek out bigger homes in the suburbs or in regional areas.

“We are seeing houses outperform units in Melbourne and prices for houses growing at a faster rate than for units and so that price gap is Top 10 suburbs with the biggest price gaps between house and units:

Suburb Median house price Median unit price Gap between houses and units

Toorak $4,181,250 $950,000 $3,231,250

Brighton $2,872,500 $970,000 $1,902,500

Malvern $2,364,000 $660,000 $1,704,000

Balwyn $2,180,000 $630,000 $1,550,000

Hawthorn $2,102,000 $603,500 $1,498,500

Kew $2,180,000 $734,900 $1,445,100

Hawthorn East $1,995,000 $630,000 $1,365,000

Glen Iris $2,050,000 $687,250 $1,362,750

Elsternwick $1,993,075 $661,000 $1,332,075

Armadale $1,935,000 $618,000 $1,317,000

edging marginally higher,” Dr Powell says.

“I think that gap will continue to creep higher as we continue to see house prices increase at a greater rate than units … I think the pandemic is playing into that in part because we are seeing that shift away from higher density living,” she says.

Buyer’s advocate Cate Bakos says if you are looking to buy an apartment for yourself, “then now is a great time to buy because the disparity between housing and units hasn’t been this wide in some time”.

“There is a real window of opportunity while we don’t have international students arriving or money coming in from the mainland, because investor appetite is low, there is reduced competition, motivated vendors and even some discounting,” she says.

However, with vacancy rates soaring in many inner-city locations and suburbs close to universities, due to the drop in international students and new immigrants, Ms Bakos says buying an apartment as an investment can be risky in some areas.

“The bad news is that, until we get overseas students returning, these places will remain out of favour and prices will remain low, so buying one for short-term gain is not a good idea,” she says.

“We’re seeing a much greater demand for houses and land. I think because of COVID, people are just wanting a bit more space and a bit more land,” he says.

Mr Johnstone said the widening price gap, which saw house prices grow by 18.2 per cent in 2020, compared to just 0.1 per cent for units, was also being impacted by the “enormous supply” of apartments coming on to the market in the bayside area.

“If you want to buy an apartment bayside there is an enormous amount of choice but when it comes to houses, we are seeing a shortage of stock and that is pushing up house prices,” he says.

Miriam Sandkuhler, CEO and property advocate at Property Mavens, says the current low appetite among investors for apartments in many inner-city areas does provide a good opportunity for some buyers, as long as they “cherry pick” the right kind of apartment.

“Melbourne has seen an oversupply of apartments in some areas, particularly in inner Melbourne,” she says. “And if you search for apartments in the CBD, for example, right now, there are hundreds and hundreds of apartments for sale.

“But, to be honest, there’s a lot of rubbish out there. There’s a lot of poorly built investment stock that doesn’t make a good home, so buyers really have to cherry-pick and know what attributes will compromise that property’s ability to grow in value, such as buying in an oversupplied area or in a poorly built development.

“Buyers should be looking for smaller developments with less than 50 or, even better, less than 20 apartments, that are primarily owneroccupied rather than investor stock. They should also be keeping away from areas where there is an oversupply of apartments and be aware of any planning proposals that will lead to further development and higher density,” she says.

“It all comes down to property selection and knowing what is going to not just hold its value but grow in value over time.”

Legal Update: The Owners Corporations Act amendments are now law

Written by Phillip Leaman, Principal, Tisher Liner FC, 03 8600 9333, www.tlfc.com.au

The Owners Corporations and Other Acts Amendment Act 2021 has now passed Victorian Parliament and will take effect from 1 December 2021. Expert Owners Corporations lawyers, Tisher Liner FC Law, explain the changes to the Owners Corporations Act 2006.

What does the Act try to achieve?

The Act amends the Owners Corporations Act 2006 as follows:

1. to provide for five tiers of owners corporations that allow for the degree of regulation of owners corporations to be based on the number of occupiable lots; and

2. to remove the requirement for owners corporations to have a common seal; and

3. to allow owners corporations to levy fees to cover the premiums for reinstatement and replacement insurance or for any excess amount on an insurance claim; and

4. to allow owners corporations to dispose of goods abandoned on the common property; and

5. to provide for what may be disclosed at the first meeting of an owners corporation; and

6. to amend the duties of members of committees and subcommittees of owners corporations; and

7. to further restrict the circumstances in which a person with a criminal record may be registered as the manager of an owners corporation; and

8. to insert new duties of managers of owners corporations relating to contracts for goods or services, money held on behalf of owners corporations on trust and the obligation to disclose beneficial relationships with suppliers of goods or services; and

9. to provide for owners corporations incorporated in respect of land used or to be used for the purposes of a retirement village; and

10. to empower VCAT to make orders— - that authorise lot owners to commence, prosecute, defend or discontinue any proceeding on behalf of owners corporations; or - to require lot owners to pay the reasonable costs of owners corporations; and

11. to amend the Subdivision Act 1988— - to specify how lot liability and lot entitlement must be allocated; and - to require an initial owner to engage a surveyor to set out the initial allocation of lot liability and lot entitlement.

What are the new tiers?

Owners Corporations will have different obligations depending on what tier they are in. The tiers are:

Number of Lots More than 100SS 51 to 100

How will this improve life for Lot owners?

Some of the changes include:

Exemptions for Tier 5 OCs

Tier 5 OCs will be exempt from compliance from a range of provisions of the Act to ensure that its operation can be more streamlined.

Services only owners corporations will also be exempt from compliance with a range of measures including not having to have a chairperson or secretary or provide OC certificates.

Making it easier to execute documents

OCs no longer need a common seal if they don’t want one. Documents can be signed by two lot owners authorised by the OC. OC’s need to resolve by ordinary resolution that a common seal is no longer required and can be destroyed.

Water

Confirming that if water falls on common property, it is deemed to be part of the common property allowing lot owners to take action against an Owners Corporation for flows of water from common property.

Legal Proceedings

Legal proceedings for claims up to $100,000 can now proceed when the Owners Corporation resolves to do so by ordinary resolution. Currently, a special resolution is required to issue proceedings (other than for levy recovery or breach of rules). The changes will make it easier to issue proceedings, particularly when there are Owners Corporations with a large number of lot owners who may be disinterested in any action.

Benefit Principle can apply to Annual Fees

Annual fees can be charged to lot owners on the benefit principle if

(a) the owners corporation has incurred additional costs arising from the particular use of the lot by the lot owner; and

(b) an annual fee set on the basis of the lot liability of the lot owner would not adequately take account of those additional costs.

Insurance Costs

Owners corporations can pass on insurance excess to individual lots owners in certain circumstances.

Audits

Tier one owners corporations must audit their financial statements and tier two owners corporations must have their financial statements reviewed by a CPA or Public accountant.

Maintenance Plans

Tier one and two owners corporations must prepare and approve a maintenance plan.

Removal of Goods

Owners Corporations now have a process for removing and disposing of goods on common property. 10 to 50 3 to 9 2 lot subdivision or services only owners corporation (regardless of number of lots)

Developers and appointments of managers and contracts

Developers will be restricted in engaging managers and entering into contracts at the first annual general meeting. Contracts can only be entered into for a maximum period of 3 years subject to hotel and resort management contracts.

Developers and their initial obligations

Developers who hold on to the majority of lots after the plan of subdivision is registered must now comply with such obligations for 10 years not 5 years. Initial owners (and their associates) must not be appointed as the manager of the Owners Corporation or vote on resolutions in respect to defects. They must not also designate as a private lot what normally would be common property or services or receive any payment from the manager of the owners corporation in relation to the manager’s contract of appointment.

Managers may pass interim resolutions

The Act will allow managers to pass interim resolutions on some matters where if no lot owner is present at the meeting ensuring that managers can ensure that owners corporations can function. A common example of this might be the manager resolving to obtain insurance in circumstances where insurance is about to expire.

Interim resolutions

If a general meeting of an owners corporation has a quorum and the special resolution is not passed with the requisite number of votes, but there is no votes against the resolution, then the resolution will be taken to be an interim resolution. This will make it easier for larger owners corporations to make decisions where there are large numbers of lot owners who don’t turn up to meetings.

Committees

Committees must have no more than 7 members unless there is an ordinary resolution which increases that to 12 members.

Managers

Contracts of appointments for managers must not include certain prescribed terms such as:

• making an owners corporation convene a general meeting or pass a special resolution to revoke the manager’s appointment;

• allowing the manager to renew the contract of appointment at the manager’s option;

• automatic renewal of contracts;

• specifying the terms of notice before termination to exceed 3 months for tier one and tier two owners corporations or one month for all other tiers.

Adding additional obligations for Managers to:

• take reasonable steps to ensure that any goods or services procured by the manager on behalf of the owners corporation are procured at competitive prices and on competitive terms; and

• not exert pressure on any member of the owners corporation in order to influence the outcome of a vote or election held by the owners corporation; and

• before a contract is entered into for the supply of goods or services to an owners corporation under which a manager is entitled to receive a commission, payment or other benefit, must give written notice to the chairperson of the owners corporation disclosing the commission, payment or other benefit in accordance with section 122B.”.

• holding money in separate bank accounts (unless otherwise agreed) and provide copies of financial statements of bank accounts on request by an owners corporation.

• disclosing beneficial relationships or commissions, payments or other benefits with or from suppliers.

Rules

An owners corporation may make rules in respect of proposed works to renovate or alter the external appearance of a lot—

• to protect the quiet enjoyment of all other lots and the common property during those works; and

• to protect the structural integrity of any building on the plan of subdivision from those works; and

• to ensure the market value of any other lot does not decrease as a result of those works.

• Rules in general cannot be oppressive to, unfairly prejudicial to or unfairly discriminates against, a lot owner or an occupier of a lot. Occupiers and Guests

Occupiers will be responsible for a guests’ behaviour.

VCAT Orders

VCAT will be able to order a lot owner to pay the Owners Corporation costs incurred in recovering unpaid amounts from the lot owner (other than costs in the proceeding). This is to clarify that the section does not affect the power of the Tribunal to award costs under Section 109 of the Victorian Civil and Administrative Tribunal Act 1998.

Lot owners may bring, defend, discontinue an action on behalf an Owners Corporation where a special resolution or ordinary resolution has not passed and they make application to the Tribunal. It is then up to a lot owner to prove to the Tribunal why the lot owner should not be permitted to take the action.

Summary

The amendments attempt to make Owners Corporations easier to operate, particularly where there are large number of lot owners who are not interested in taking part in the owners corporation. It also tries to bring some formality to the obligations of managers and to stamp out the practice by some managers of secretly profiting from owners corporations without full disclosure. Whilst the amendments might not go as far as some would have liked, they do help to bridge the gap and address some of the key concerns that lot owners have had difficulty with under the current legislative regime. Of note, lot owners will be pleased with their ability to have additional protections from initial developer owners as well as the ability to institute legal proceedings against builders when there are building defects by interim special resolutions.

Better Apartment Design Standards Review

Written by Robert Carletti, Tract, 03 9429 6133, www.tract.com.au

As a part of the Victorian Labor Government’s election in 2018, there was a commitment made to improve the external amenity of apartment buildings through reforms to the Better Apartment Design Standards (BADS). The changes focussed on the requirements around open spaces, landscaping and the integration of buildings into their external environment and extensive consultation took place during 2019.

After being on the backburner during the height of the COVID-19 pandemic in Victoria, the draft revised Standards and accompanying Guidelines (BADS 2.0) were released over the weekend. They are proposed to take effect sometime this year. At this stage, it is unclear whether these have been released for further comment, or if the drafts will become part of the Victoria Planning Provisions.

What are the Changes?

Whilst the changes are generally consistent with what was tabled during the consultation phases, there are a number of surprises, particularly in relation to balconies. The proposed changes are summarised as follows: Balcony Size – A reduction in the area and dimension requirements for balconies where they face north or south.

Balconies for buildings greater than 40m in height – Deletion of the requirement to provide balconies for buildings over 40m / 13 storeys, but a new requirement for an equivalent space to be provided as additional internal space within the living area or bedrooms.

Communal open space – Required for developments with 10 or more dwellings (currently required for 40 or more dwellings). The space is to include landscaping (canopy trees and productive gardens) as well as space for entertainment, leisure and recreation. There is an allowance for some of the communal space to be provided indoors.

Building Quality – Insertion of a new Standard that requires an assessment of the quality and durability of building materials. A list of ‘preferred’ materials has also been provided in the accompanying guidelines.

Landscaping – Revisions to the requirement for deep soil canopy tree planting, with the notable deletion of the allowance to provide an ‘equivalent canopy cover’ where deep soil canopy tree planting cannot be provided. Instead, more extensive guidelines are provided as to how planter boxes can be deemed as deep soil canopy tree planting.

Wind Assessment – Requirement for a wind assessment to be prepared for buildings of 5 storeys of higher (assessed under Clause 58).

Comments

The changes will no doubt provide increased amenity to future residents of apartment buildings – although it is not yet known if these revisions are practical, or if they will have unreasonable cost implications.

Without a doubt, the biggest surprise is the reduction to balcony sizes. This is particularly surprising given the media discourse during the COVID-19 lockdowns about the importance of access to open space. Having said this, the amended balcony sizes seek to ensure that there is a good level of daylight to living areas providing a more nuanced consideration of apartment amenity. This is a welcome change noting the many apartments which have struggled to achieve the BESS requirements for daylight levels where access to light has been compromised by balcony depth.

The removal of the balcony requirement for buildings over 13 storeys / 40m (with this space to instead be provided internally) is a practical amendment. It recognises the limited usability of balconies at this height (and of the oft-seen alternative of winter gardens).

The added requirements regarding the durability of quality of materials (particularly off the back of the cladding crisis) is also a constructive change that will ensure better longevity of buildings.

With respect to deep soil planting, the deletion of the alternative to provide an ‘equivalent canopy cover’ will present a challenge on constrained sites or where large basements are provided. The ‘equivalent canopy cover’ previously provided a recognition that many sites (for instance, those in a commercial context) did not need to provide extensive tree planting. Time will also tell whether the planter box requirements outlined (where the deep soil planting cannot be used) can be achieved, particularly given the typical locations communal space is often provided (such as on rooftops). Whats Missing?

Given the growth of apartment typologies in recent years, it is no wonder that there has been such a substantial focus on improving the amenity of these buildings. However, it seems odd that in this time there have been no meaningful updates to ResCode. It is becoming increasingly clear that there is a disconnect between the BADS and ResCode Standards, with ResCode now falling behind in the assessment of overall internal amenity. What makes these buildings different from apartments that doesn’t require high quality building materials, or areas of communal open space for resident use?

It is also interesting that the variations that apply where BADS and ResCode standards are applied to public and social housing developments (via the recent introduction of Clauses 52.20 and 53.20 – the ‘Big Housing Build’ clauses) have not made it into BADS 2.0. For example, there is a recognition in the Big Housing Build clauses that it is appropriate to provide higher front fencing for up to 30% of a site frontage where secluded private open space is provided in a front yard. This has been ‘common practice’ for townhouse and apartment developments in recent years (albeit not recognised in the scheme), yet has not been included in this amendment, despite appearing to be a common sense change.

There are also a number of missed opportunities in relation to clarifying ambiguity, including whether the minimum ‘depth’ for living areas in apartments is intended to read as a minimum dimension.

Overall, it is positive that DEWLP have committed to ongoing monitoring of the BADs provisions and that there is a desire to listen to industry feedback as these Standards are applied in the ‘real world’. The changes are also a step in the right direction, however it would be beneficial to further review and refine some of the potentially problematic changes.