The latest happenings in the Melbourne property market. For our Essays and The Secret Agent Report, see our Research page.

Category Archives For: Innovation

Virtual Real Estate – Paying millions for thin air or intelligent investment?

Earlier this year a new property record was set. Interestingly enough, for the sale of virtual property. One investor has paid $US6 Million ($5.7 Million) for ‘Planet Calypso’  – a fictional place on a social gaming website.

This might seem a little crazy, but this kind of thing could be the way forward for real estate – investing virtually, not physically. The purchaser of Planet Calypso makes money on the investment by selling virtual homes and taxing other gamers to enter the planet. Planet Calypso processed $US428 Million, in player to player transactions in 2010 alone.

Many people are there for fun and shy away from actually spending money a substantial amount of money in these online social arenas, however some of those who have invested time and money have seen some pretty big returns – one in particular around $US150,000 a year.

It may appear less attractive to many than investing in real physical real estate for most people will want be to able to touch or feel their new purchase, however with the progression of so many things online, it really is anyone’s guess as to what these kind of real estate transactions hold for the future of virtual property.

Taller but smaller

It seems we are going taller but smaller terms of new developments as the trend continues to fit more in limited space.

The proposal for a 35 storey building, built on a tiny 20 by 18 metre block on the corner of Russell and Little Lonsdale Street’s has gained approval. The Crystal is an $80 million project and the latest very tall building to go ahead. At this sort of height the development would tower over the State Library Building’s.

Will this sort of thing be the way of the future? It will certainly assist to solve some of our issues with housing shortage within inner city areas and with this building approval the door has opened to other developers to follow suit.

For more info, check out this article.

The $300 house

Imagine being able to build a sustainable home for only $300.

This was the challenge issued to thinkers all over the world about to how to better house the poor, in some of the worlds poorest countries. The idea is to replace the shacks that many of the poor are subject to live in, with more sustainable and durable housing.

A few guidelines were laid down and people invited to put forward ideas. The homes should be built of mass produced materials tough enough to protect their inhabitants from a hostile world, they should be equipped with the basics of civil life and should be improvable so families can adapt them to their needs.

There appears to be a number of obstacles along the way and the simple idea may be a fair way away from becoming a reality, however the concept is very impressive indeed.

For more info, check out this article in the Economist or the $300 house website.

The viability of smaller apartments; why developers should take note of Gary Chang

The world is growing rapidly with an estimated further 2 billions people to be added over the next 40 years.  Something has to give to make the planet ( this includes Australia ) a viable place that can accommodate these major changes.

Enter Gary Chang.  Gary is an amazing architect.  We’ve featured his famous apartment on this blog before. Read more here…

Well known for his own apartment which he designed.  The apartment is only 30 square metres yet features 24 different potential spaces within that space.

The key quote from an interview with Gary by Milk Design is this:

“Psychologically, one should “maintain” an open mind on how to use the space and avoid, as much as possible, the pre-conceptions on what a “home” should function and look like.”

This sounds like a smart concept to take on board.


Google – departing with Real Estate search on Google maps

I’m sure many involved in,, + others will be delighted with Google moving out of the Real Estate search business.

As an alternative to the main search companies, Google offered options to people, including do it yourself sellers.

Google has spoken about a lack of traction with the use of real estate search. This could mean however that they are about to acquire a large real estate search business. You never know with Google!

Lack of information

We are never ceased to be amazed as to the amount of information available to consumers in the US, compared to the Australian market.  We are often kept in the dark.  The tools that US consumers can use really make them a savvy bunch.  One such tool, Trulia, provides a wide volume of information collated in an easy to use application.

If we look at our property market, which is riddled with mystery and some would say smoke and mirrors.  If property consumers had the same level of information at their hands we wonder if we would see the same level of high prices. It would be of great benefit to consumers if they knew how long a property had been on the market and what other homes were selling for in the area, there two tools alone would arm a buyer with the simplest of data. Rather than going into an Auction or property negotiation blind.

Perhaps one day our property market will have the same level of openness as the US, I am sure the buyers in the market would agree.

That’s expensive.

There is a new property on the market,  perhaps not to every-one’s style or budget.

The vendor is looking for a cool $1billion, that’s right $1billion.

Indian businessman, Mukesh Ambani is selling his recently completed 27 storey home in Mumbai, complete with helipad.  The home which towers of the cities slums requires a staff of 600 to maintain it.

The first months power bill was equivalent to that of 7000 local homes.

So if you have a spare billion sitting around, give us a call!

Cook Islands – My holiday in paradise and what we could all learn from their real estate market

I’ve just come back from a short break. Just over a week was spent in Rarotonga and Aitutaki in the Cook Islands.

If you’ve never been to the Cook Islands, I’d highly suggest a visit there at some point. The place is paradise and the people are among the most friendly I’ve encountered anywhere in the world.

As much as this was a holiday – my curiosity for real estate led me to the local real estate office to check the values of land and property.

I was a little surprised to see the office ‘closed’ with a sign that said ‘if you are foreign citizens, you cannot purchase property anywhere in the Cook Islands – we are sorry about that’

Pretty much real estate in unavailable to outsiders (including New Zealand citizens). Certain land holdings may be available for hotels and business’s but even these are limited to 60 year leases.

Cook Islands is a tribal place. Land is passed down to decedents and from what I could see this is a good thing.

For one thing, many locals seemed actually well off. Unlike many other places in the world, the locals seemed to be less focused on money. Most locals I spoke with laughed at having a mortgage and very few paid rent either. They made enough to cover food expenses and that was about it.

Secondly major development has been limited due to the many restrictions – this has helped keep the place still largely ‘untouched’ which is very rare to see these days.

Introducing a free market without restrictions would be a very bad move for a place like the Cook Islands. So while I’ve always been a big fan of a free market society – the system currently used in the Cook Islands really works for them.

Innovation comes from tough times

Recently when travelling in San Francisco, I used a service which I’ve written about a few times on this blog call

It’s an incredible service that I highly recommend to anyone travelling overseas. I used this to acquire a loft apartment for a week.

Basically people can lease out a bedroom, an entire apartment or even a tent in their backyard.

What’s so special about this service is that it makes the following changes:

1. It lets people slice up and lease their real estate like never before. Letting out rooms for a short term has always been tough, but lets you do this.

2. It gives travellers to a new city or country another option besides hotels. I don’t know about you – but my best experiences overseas have been when I’ve hired a private apartment and lived without the trappings of a hotel. You get to experience a destination like a local.

3. A service like this gives a mortgage holder a chance to help pay off their property debt by incurring extra income from their asset.
This in America, has helped many people fight off foreclosure.

4. Moving into a more mobile society, airbnb lets people well and truly be mobile. A web development guy that worked on our new site is currently living off the site in LA. He swears by it.

So this presents an interesting situation for real estate, landlords and agents. We normally see 12 month leases drawn for most places yet I’m sure we will see a swing in the other direction moving forward.

What’s really interesting is that New York has just banned short terms lettings of less than 30 days. Possibly under pressure from big hotel organisations.

In Melbourne, I’m noticing short term accommodation become more and more popular. In fact it also offers another opportunity to investors
who are seeking higher returns in a generally speaking poor return environment.

Moving past paper

We should really get better at paperless transactions.

It’s the frustration to many buyers on waiting for contracts getting sent by post from solicitor to agent to purchaser.

The art of a pdf contract is nothing new but still foreign to many business practices in Melbourne. Some interesting programs are coming out with digital signatures and provide a much speedier way of doing business.

Naturally we will see a slow uptake and some concerns to begin with, but just like internet banking – I think people will grow confidence with digital exchanges in the not too distant future.