2011 Winter

The Property Review
Winter 2011
Tower & London
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Tower & London
THE PROPERTY REVIEW
A quarterly magazine published by
Tower & London
Enquiries regarding this magazine should be made to:
Tower & London
38 Alfred Street,
Milsons Point NSW 2061
Phone: (61) 2 9956 6500 Fax (61) 2 9956 6522
Email: reception@towerlondon.com
Disclaimer:
The information contained in this publication is for general information purposes only. Readers are advised that
while an earnest effort has been taken to ensure the information in this document was obtained from reliable
sources, Tower & London gives no guarantees or warranties, written or implied, over the accuracy of the information
provided. Tower & London Pty Limited disclaims all responsibility for any loss or damage suffered as a result
of the use of the contents of this publication. The views expressed in this publication are those of the writers
and do not necessarily reflect the views of the publisher.
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Table of Contents
Winter 2011
20/7 Northcliff Street,
Milsons Point
Front cover
Message from John Tower
Why and who should invest in residential
property? 4-5
Lower North Shore Sales Data 6-7
Land Tax 2011 8
Capital Gains Tax and Foreign Residents 9
Stamp Duties on purchase in NSW 10
Current Sales 11-22
Tower & London offices 23
Useful Resources
Back Cover
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3

John Tower
M.D. Tower & London
Licens ed Real Estate Agent
Registered Property Valuer
Why and who should invest in residential
property?
Not everyone likes to invest in the stock market, a
small percentage of people w ill invest in commercial
and retail property, yet people are draw n to
residential property. Many investors w ill use their
homes as collateral to buy an investment property
and enter into a mire of problems.
What’s wrong w ith residential property? Well, just
about everything, such as: tenancy laws, fluctuating
interest rates, unreliable property managers,
low returns, very little average annual capital
gains, high strata levies, poorly managed buildings,
tamp duty on purchase and Capital Gains
Tax.
So w hat's good about residential property investment?
The short answ er is: not much. The reader
might ask: w hy is this Real Estate Agents so
much against residential property investment?
The answ er is not residential property, it is the
investors themselves and the system they have to
abide by.
Residential property investors in Sydney are
mostly mums -and-dads, some professional individuals
w ith high incomes, young couples or singles
that cannot afford to live in the property they
ow n, and very a few syndicates.
Most of the mums and dads should not ow n an
investment property. Here are a few reasons why:
1. Most have used their home as equity to be able
to borrow the funds or have borrowed too much.
Most have problems w ith paying for repairs and
become desperate w hen the property is vacant
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for a couple of weeks.
2. The w ives like to decorate or renovate the investment
property; usually w ith minimum expenditure
and maximum unsuitability. The result
is a poorly renovated property that adds to the
stress of owning a residential property. The husbands
are often useless.
3. Some insist on getting many quotes for small
repairs, or have their good friend, w ho w ill fix it
for much less, do the work. Often the result is
poor quality and more needs to be spent to correct
what should have been a simple repair undertaken
by a professional.
With respect to young couples and singles; these
are mostly generation “y”: they are educated, articulate,
and can give a very strong argument
backed information they have gathered from their
constant Google searches. Most of these buyers
would have benefited from one or more government
subsidies for their first property. Here are
some reasons why this group should not invest in
residential property: they should save to ultimately
buy their home.
1. They cannot afford it; the only reason many are
able to borrow the funds is because they buy
the property on the pretence that they w ill live in
it, to get the Government grants; then move
back to live w ith their parents or share with others.
2. They often conduct market analysis, and instruct
their property manager w hat the rent should be;
the property stays vacant much longer than it
should; and in the end, the real market rent is
achieved; resulting in many w eeks of w asted
vacancy would never be recovered.
Professional individuals are perhaps the most
suitable segment for this type of investment. These
are men or w omen aged over 35 w ith high incomes
and are solid middle to high level managers
or w ith their ow n established business or medical
practice. There are many reasons why this
segment should be more representative of this
style of investment:
1. They benefit greatly from negative gearing and

Depreciation Allow ances, as they pay a considerable
amount of tax.
2. They make decisions based on sound economic
sense, some might like to buy investment property
because they like it, or they might leave it to their
children, but most w ill listen to good advice and
make a considered judgement.
3. They don’t have time to w ant to know about small
repairs or worry about not enough rent, because
they have not borrowed to the kilt, and therefore
they can easily maintain their investment, relying
on professional advice.
4. Because they are practical business minded individuals,
they understand the limitation of the law s
governing tenancies and can logically and fruitfully
negotiate good outcomes.
5. Because they are mostly in business or managing
a business or a practice; they tend to lean tow ards
quality property managers and property professionals,
their aim is not get the low est rates but to
get the best service at competitive rates.
Finally: Property Syndicates, this is rare group of
people that put their resources together, purchasing
and managing good residential property. They
often include a Real Estate Agent, a law yer and
an accountant. These structures are less common
these days as do-it-yourself super schemes, have
largely taken over.
The residential market is very poorly served by the
various levels of Government and their inadequate
policies; here are some reasons w hy these bodies
are the cause of the falling standards of this sector:
Government policies and practices:
1. Registration of Property Managers are not recognised,
the Registration Certificate states the
person, regardless of gender, is a “Real Estate
Sales man”. A young w oman can w ithin w eeks
be registered as a Real Estate Salesman, be
working in a Real Estate office making important
decision and advising clients on various
aspects of their investment. There are of
course various coursed and Professional
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Development Points they need to earn in order
to renew their registration, but these courses
are offered by many institutions and can be
anything from learning how list a property to
how to sell one. Nothing to do w ith Property
Management. The Real Estate Institute of
NSW is a w onderful institution: it offers relevant
courses to property managers on regular
bases given by true professionals and passionate
people w orking in the industry.
2. Tenancy Law s: This is the largest problem area
to property investors in NSW, recently
these tenancy laws w ere updated and
drastically altered the balance of fairness to
the tenant’s favour. Backed up by a Tribunal
system that resembles a Kangaroo Court,
where the law of evidence comes w ell behind
tenants’ 'hard-luck stories. The Tribunal members
sometimes make ridiculous decisions
based in intuition and emotion.
3. Tax Policies: There are good reasons for high
income individuals to invest in residential property;
these tax incentives include: negative
gearing and depreciation allow ances; however,
Capital Gains Tax, although halved in recent
years, it remains an obstacle w hen a decision
is made to sell the property. This tax should be
completely abolished in order to attract good
long-term residential property investors.
Other radical area of change is needed of the State
Taxes is Stamp Duty on purchase. Instead of discounting
or eliminating stamp duty on purchase for
first home buyers, the Sate Government should
consider reducing Stamp Duty to residential property
investors, this will surely attract real investors,
not those that fooling the Government, pretending
they w ill live in the property. In the end it w ill be
good for tenants, most of all, as w hen better informed
and financed professional investors are in
the market place buying residential property, the
supply naturally increases, placing less stress on
tenants and reducing the pressure on rent increases,
especially to young tenants saving to buy their
first home.

Lower North Shore Sales Data
2,500
House Sale Prices
2,000
1,500
$1,000
1,000
500
-
Mar-08 Jun-08 S ep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 Dec-10 Mar-11
North Sydney 1,089 1,093 936 1,030 1,045 990 1,135 1,130 1,300 1,258 1,201 1,186 1,150
Mosman 1,813 2,150 1,785 1,835 1,780 1,950 2,050 2,000 2,150 1,988 2,110 2,285 2,238
Willoughby 1,038 1,053 1,175 1,000 1,035 1,150 1,164 1,250 1,312 1,345 1,285 1,250 1,310
350
House Sales Volume
300
250
200
150
100
50
-
Mar-08 Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 Dec-10 Mar-11
North Sydney 124 151 99 85 74 157 164 215 168 146 126 142 117
Mosman 81 92 65 60 61 111 116 107 132 101 84 98 75
Willoughby 218 200 138 159 146 6 244 271 314 240 184 161 191 164
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Lower North Shore Sales Data
750
Apartment Sale Prices
700
650
$1,000
600
550
500
450
400
Mar-08 Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 Dec-10 Mar-11
North Sydney 551 570 543 510 517 519 550 610 635 645 616 630 615
Mosman 460 535 550 520 536 529 527 620 695 603 643 645 635
Willoughby 500 503 480 488 489 499 520 563 570 600 581 582 595
700
Apartment Sales Volume
600
500
400
300
200
100
0
Mar-08 Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 Dec-10 Mar-11
North Sydney 391 395 317 308 350 516 651 545 450 533 539 546 469
Mosman 116 116 97 82 105 173 173 149 112 136 129 152 131
Willoughby 220 195 181 174 211 267 347 268 215 194 193 173 175
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Land Tax 2011
Who needs to pay?
Land tax in NSW
If you own any property tha t is not your principal place of residence (your home) as at midnight on 31 December, including a holiday
house or unit, you may be liable to pay land tax. This includes property that does not earn any income.
The amount of land tax payable depends on the combined value of any taxable land you own or have an interest in, excluding exempt
land that is above the threshold. The value of taxable land does not include a ny structures or improvements on the land such
as a house. Any land you own outside of NSW is not subject to land tax in NSW.
What land is exempt?
Principal place of residence
Your principal place of residence is genera lly exempt from land tax. You can usually only claim an exempon for a principal place of
residence on one property.
If you use your land as your principal place of residence and for non-residenal purposes, for example, if you run a business on your
land, you may be eligible for a reducon in land tax for the proporon used as your residence.
If a company is an owner or part owner, generally it is not entled to an exempon for a principal place of residence.
Concession for land intended as your principal place of residence
You generally do not pay land tax on land intended as your principal place of residence, provided you do not own another property
which would have qualified for a n exempon as your principa l place of residence at the ta xing date. You may be elig ible for this concession
if you:
a) have purchased unoccupied land where you intend to build your principal place of residence (your home), or
b) are renovang an exisng home that you intend to occupy as your principal place of residence.
This concession a pplies for the four tax years immediately following the year in which you acquire the property, or, where you are
rebuilding or renovang, for the four tax years starng from the me the building or renovaons physically commence. There is no
discreon to extend the concession. Prior to the 2011 tax year, the concession applied for two tax years and could be extended under
certain circumstances.
How is the value of your land determined?
The Valuer General values a ll land in NSW annually and provides these values to OSR for land tax purposes. Values are determined as
at 1 July, preceding each land tax year.
Strata unit valuaons
For stra ta units, the land value for each individual strata lot is calculated on a proporonal basis using the unit entlement for each
lot and the aggregate for the strata scheme. Landowners can find out more, or request a land valuaon brochure and a general valuaon
sales report by calling the Land and Property Management Authority toll free on 1800 110 038.Read more about land valua-
ons at www.lpma.nsw.gov.au/valuaon
Average values
Since 2007, the value used to determine your land tax liability will generally be the average of the land value for the current tax year
and the land values for the previous two years. Where a parcel of land was only recently created (eg by subdivision or amalgamaon)
the average value will be based only on the land values for those taxing dates when the newly created land item did exist.
How is land tax calculated?
Land tax is calculated on the combined value of all the taxable land you own.
The land tax threshold for 2011 is $387 000. This means your land tax assessment is calculated on the combined value of all the taxable
land you own above this threshold. The amount of tax is $100 plus 1.6 per cent of the land value between the threshold a nd the
premium rate threshold ($2 366 000) and 2 per cent thereaer.
This informaon 8 is an extract from the NSW Office of S tate Revenue website.
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Capital Gains Tax
Capital Gains Tax and Foreign Residents
The way that capital gains tax applies to foreign residents has changed. If you are a foreign resident
and you made a capital gain before 12 December 2006 on disposal of an asset that had the necessary
connection with Australia, the gain would generally be taxed. On or after 12 December 2006, a
foreign resident makes capital gains only on the disposal of taxable Australian property. Capital
gains tax (CGT) generally does not apply to pre-CGT assets - that is, assets acquired before 20
September 1985.
Unless otherwise specified, 'Australian resident' means a resident of Australia for tax purposes.
Assets which have a necessary connection with Australia include:
land or a building in Australia (or an interest in land or a building)
a CGT asset you have used in carrying on a business through a permanent establishment in
Australia
a share in a private company that is an Australian resident company for the income year in
which the CGT event happens
a share, or an interest in a share, in a public company that is an Australian resident company
and in which you and your associates have owned at least 10% of the value of the shares at
any time during the five years before the CGT event happens
a unit in a unit trust that is a resident trust and in which you and your associates have owned
at least 10% of the issued units at any time during the five years before the CGT event happens
an interest (other than a unit) in a trust that is a resident trust for CGT purposes for the income
year in which the CGT event happens, and
an option or right to acquire any of the preceding CGT assets.
If your assets do not fit within one of the above categories - for example, land or a building overseas
or shares in a foreign company - they do not have the necessary connection with Australia.
Assets that are taxable Australian property include:
a direct interest in real property situated in Australia (for example a house or farm located in
Australia) or a mining, prospecting or quarrying right to minerals, petroleum or quarry materials
in Australia;
a CGT asset that you used at any time in carrying on a business through a permanent establishment
in Australia, and
an indirect Australian real property interest - which is an interest in an entity, including a foreign
entity, where you and your associates hold 10% or more of the entity and the value of
your interest is principally attributable to Australian real property.
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This is an extract from the ATO website.

Stamp Duty on Purchase in NSW
Dutiable value of the dutiable property subject
to the dutiable transaction
Rate of duty
$1.25 for every $100 or part of the dutiable
$0 - $14,000
value
$14,001 - $30,000
$175 plus $1.50 for every $100 or part , by
which the dutiable value exceeds $14,000
$30,001 - $80,000
$415 plus $1.75 for every $100 or part, by
which the dutiable value exceeds $30,000
$1,290 plus $3.50 for every $100 or part,
$80,001 - $300,000
by which the dutiable value exceeds
$80,000
$8,990 plus $4.50 for every $100 or part,
$300,001 - $1m
by which the dutiable value exceeds
$300,000
$40,490 plus $5.50 for every $100 or part,
over $1m
by which the dutiable value exceeds
$1,000,000
· A sale or transfer of land (including improvements) or a business in NSW is liable to duty. It is immaterial whether
or not the transaction is effected by a written instrument or by other means, including electronic means.
· A liability for duty arises when the sale or transfer occurs. However, if the sale or transfer is effected by a written
instrument, liability for duty arises when the instrument is first executed.
· Duty is payable within 3 months of the date liability arises. The purchaser or transferee is liable to pay the duty.
· Purchasers of Newly-constructed dwellings worth up to $600,000 will receive 50% discount on stamp duty if they
purchase before 30 June 2010.
(source: NSW office State Revenue website)
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Current Sales
28/110 Alfred Street, Milsons Point
For Sale $1,600,000
An Ordinary apartment; spectacularly transformed.
Stanic Harding Architects brought this apartment back to its shell allowing for a new design, to fill it
with light & harbour views, while separating public from private spaces. A remarkable timber cabinet
decorates the living room concealing entertainment equipment is an example of the extensive joinery
applied. The kitchen wrapped by a cornerless pod on one side and a gorgeous dining table on the
other equipped with Gaggenau. Generous Master bedroom contain a dressing room forming part of a
luxurious ensuite. Large second bedroom, fully fitted; bathroom separating a third bedroom/ study.
Semi circled balcony cradles the entire harbour side of the apartment. pleasant harbour views compete
with stunning interior design. Double secure parking & storage. Near Milsons Point trains and
ferries.
Details and Viewing: Phone: 9956 6500
Email: reception@towerlondon.com
www.towerlondon.com
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Current Sales
20/7 Northcliff Street, Milsons Point
For Sale $1,700,000
Harbour View Delight
A very large two bedroom apartment in a perfect position, close to the harbour’s edge
and enjoying spectacular harbour bridge and city views.
This property is has a wide balcony that extends the width of the apartment, two large
bedroom, the main has wonderful water views, superb bathrooms and kitchen, timber
floors and first class fixtures and fittings. Situated between the ferry wharf and the railway
station; secure parking space is on title.
Details and Viewing: Phone: 9956 6500
Email: reception@towerlondon.com
www.towerlondon.com
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Current Sales
4/139 Middle Head Rd, Mosman
For Sale around $1,250,000
Mosman Mews In the Heart of The Village
Modern and tightly held block of 24 secure apartments on the edge of Mosman village
shops. This exceptional apartment is on the street level yet set back from the noise
and bustle to the rear of the block. Comprising three bedrooms all with built-ins and
opening onto balconies; the main is substantial. The living room is just the right distance
from every other room, opening onto a private balcony. The kitchen is delightful,
and both bathrooms and laundry are well appointed. Ample storage is provided within
the apartment and a separate external store room; additionally, large storage units are
erected inside the double lockup garage included on title.
Details and Viewing: Phone: 9956 6500
Email: reception@towerlondon.com
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www.towerlondon.com
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Current Sales
1101/93 Pacific Hwy, North Sydney
For Sale $550,000
SOLD
Harbour Bridge Views
Nearly the size of a two bedroom unit, this is a rare offering in a modern quality block and
perched on the 11th floor attracting spectacular harbour and city views from the living
room and bedroom. Separate study the size of a 2nd bedroom can be completely closed
and used as a quest bedroom. Eat-in kitchen and dining area with polished timber floors.
Lounge area opening to full view from floor to ceiling glass windows. North Sydney station
is a stone’s through away.
Details and Viewing: Phone: 9956 6500
Email: reception@towerlondon.com
www.towerlondon.com
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Current Sales
1602/55 Lavender Street, Milsons Point
For Sale $3,800,000
3 Bedrooms, 2 Bathrooms, 2 Parking spaces and
one spectacular view
The last building to the North of Milsons Point and to the east of Clark Park ,“Latitude”,
Winner of the 2008 UDIA National Awards for Excellence, Mirvac’s finest building in Milsons
Point features this superb apartment perfectly perched on the 16th floor and capturing
the ultimate harbour view. All rooms wrapped in glass, opening onto balconies with
shutters, enjoy harbour views spanning across to the Blue Mountains.
Details and Viewing: Phone: 9956 6500
Email: reception@towerlondon.com
www.towerlondon.com
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Current Sales
2102/ 2 Dind Street, Milsons Point
For Sale $2,180,000
Breathtaking views from wide open spaces
The Pinnacle is the finest apartment building in Milsons Point; this could possibly
be the best value apartment offered. Spectacular harbour views from every room
of this rambling property, perched on the 21st floor watching the sun set with a
magical array of colours. The main bedroom and the second bedroom are almost
identical in size with a smaller 3rd bedroom. Massive living room featuring a separate
dining nook. Modern kitchen, two bathrooms and a powder room are lined
with marble tiles. Double lock-up garage, 24 hour concierge, three fast lifts, swimming
pool, a gym and a beautiful lobby.
Details and Viewing: Phone: 9956 6500
Email: reception@towerlondon.com
www.towerlondon.com
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Current Sales
33a/8 Hardie Street, Neutral Bay
For Sale $490,000
Totally refurbished, One Bedroom + Study and parking
This one bedroom apartment is like no other; it has been completely remodelled to an
outstanding level of efficiency and fitted with the best quality fixtures and appliances.
French stone tiles cover the living areas. Custom made kitchen with dextrorotary features
matched by the custom made dining table and chairs, separate study area, stone
bathroom akin to those found in Istanbul and incorporating a built-in in laundry. Bright
bedroom with wardrobes, spacious north facing balcony; open parking space. All within
a few minutes’ walk to Neutral Bay shops and bus terminal. Offered fully furnished.
Details and Viewing: Phone: 9956 6500
Email: reception@towerlondon.com
www.towerlondon.com
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Current Sales
33/8 Hardie Street, Neutral Bay
For Sale $525,000
SOLD
Modern apartment refurbished with impeccable style
This one bedroom apartment is like no other; it has been completely remodelled to an
outstanding level of efficiency and fitted with the best quality fixtures and appliances.
French stone tiles cover the living areas. Custom made kitchen with dextrorotary features
matched by the custom made dining table and chairs, built-in study nook, stone
bathroom akin to those found in Istanbul and incorporating a built-in in laundry. Bright
bedroom with wardrobes and views over North Sydney lights and beautiful parks, spacious
north facing balcony; and security parking. All within a few minutes’ walk to Neutral
Bay shops and bus terminal. Offered fully furnished.
Details and Viewing: Phone: 9956 6500
Email: reception@towerlondon.com
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www.towerlondon.com
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Current Sales
3/23 Tunks Street, Waverton
For Auction 26 March 2011
SOLD
SOLD at Auction
$840,000
Bridge to Bridge Views
Newly renovated top floor apartment in a small federation building of only three; featuring
a large square deck and enjoying spectacular city & harbour views; spanning from the
harbour bridge, across the city and taking in the Anzac Bridge. Comprising two bedrooms,
the master is very large with two built-in wardrobes; brand new kitchen and bathroom;
massive living room with large floor-to-ceiling windows capturing great views. Direct
access to Waverton Station, and on title is a generous lock–up garage.
Details and Viewing: Phone: 9956 6500
Email: reception@towerlondon.com
www.towerlondon.com
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Current Sales
503/28 West Street, North Sydney
For Sale $695,000
SOLD
Large Deck Overlooking Tree Tops
This fabulous apartment of generous proportions enjoys an open and expansive view of
the beautiful surrounding tree-lined district; comprising: two bedrooms and two bathrooms
on a separate wing from the rambling living room, and opening to a large covered
deck. All rooms open onto balconies, a modern kitchen and a good internal laundry. This
apartment is meticulously kept by the occupant and comes with secure parking; yet only
few minutes’ walk to North Sydney CBD, parks and excellent schools.
Details and Viewing: Phone: 9956 6500
Email: reception@towerlondon.com
www.towerlondon.com
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Current Sales
1205/12 Glen Street, North Sydney
For Sale $720,000
SOLD
Oversized Apartment
Nearly the size of a two bedroom unit, this is a rare offering in a modern quality block
and perched on the 11th floor attracting spectacular harbour and city views from the living
room and bedroom. Separate study the size of a 2nd bedroom can be completely
closed and used as a quest bedroom. Eat-in kitchen and dining area with polished timber
floors. Lounge area opening to full view from floor to ceiling glass windows. North Sydney
station is a stone’s through away.
Details and Viewing: Phone: 9956 6500
Email: reception@towerlondon.com
www.towerlondon.com
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Current Sales
908/8 Glen Street, Milsons Point
For Sale $550,000
SOLD
Modern Building with a High Ceiling
This near new one bedroom apartment is in a fine building close to the station
and positioned on the edge of Lavender Bay. Irregularly shaped apartment distinctly
separating the lounge and dining areas, the lounge room with a high
ceiling of 3.2 meters and almost entirely opens to a large balcony with views
over sections of the Harbour Bridge; modern bathroom and a fully equipped
kitchen.
Details and Viewing: Phone: 9956 6500
Email: reception@towerlondon.com
www.towerlondon.com
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Sydney
38 Alfred Street, Milsons Point, NSW 2061
Phone: (612) 9956 6500 Fax: (612) 9956 6522
Hong Kong
6/F Luk Kwok Centre, 72 Gloucester Rd, Wan Chai
Phone: (852) 2918 8788 Fax: (852) 2918 9808
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Useful Resources
Tower & London
http://www.towerlondon.com
Department of Fair Trading
http://www.fairtrading.nsw.gov.au/
P: 9895 0111 F: 9895 0222
Consumer, Trader & Tenancy Tribunal
http://www.fairtrading.nsw.gov.au/cttt.html
P: 1300 135 399 F: 1300 135 247
Real Estate Institute of NSW
http://www.reinsw.com.au/
P: 9264 2343 F: 9267 9190
NSW Department of Lands
http://www.lands.nsw.gov.au/
P: 9228 6666
Office of State Revenue
http://www.osr.nsw.gov.au/
P: 1300 139 816 F: 1300 363 806
Reserve Bank of Australia
http://www.rba.gov.au
Real Estate.com.au
http://www.realestate.com.au/
Domain.com.au
http://www.domain.com.au/
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