If you’re involved in property or development in Australia, these definitions will help clarify many of the industry’s most commonly used terms.
Acre
The non-metric measure for an area of land measuring approximately 4,045 square metres.
Appraisal
An estimate of the market value of land and improvements at a particular point in time. In Australia, this term often refers to an opinion of potential saleability by a licensed real estate agent.
Approved
In real estate development, refers to land that has a local authority permit in place.
Apartment
A room or suite of rooms used as a dwelling unit. Not necessarily self-contained. The term ‘flat’ is sometimes used to describe a self-contained dwelling unit in multi-unit dwellings.
Auction
A public sale in which a property is sold to the highest bidder.
Auctioneer
The individual who runs an auction.
Balloon Payment
The final lump sum payment that is due on the outstanding loan amount, often larger than previous repayments.
Beneficiary
The person designated to receive the income from a trust, estate, or deed of trust.
Body Corporate
An incorporated entity and administrative body comprised of each of the lot owners in a community titles scheme.
Breach of Contract
Breaking the terms or conditions of a contract.
Brick Veneer
A single skin brick on an external wall.
Bridging Finance
Finance obtained over a short period as a prelude to long-term financing.
Buyer’s Agent
Represents a property buyer in negotiations with a vendor or their agent. Must be licensed and certified.
Capital Gain
The monetary gain obtained when an asset is sold for a higher price than originally paid.
Capital Gains Tax
A Commonwealth tax payable on the capital gain made on the sale of an investment property.
Capital Growth
The increase in value of an asset (i.e. the difference between the current value and the original purchase price).
Capital Loss
The monetary loss realised when an asset is sold for a lower price than originally paid.
Cashflow
A measure of the inflow and outflow of cash.
Caveat
Latin for ‘beware’. A caveat can be lodged on the title by anyone with a legal interest in the property and can prevent the sale of the property.
Certificate of Title
A document issued under the Torrens System of Title, showing ownership and interest in a parcel of land.
Chattels
Movable possessions (e.g. furniture) which may be included in a sale but are not part of the real estate.
Certificate of Occupancy
A document issued by a local authority to a developer permitting the property to be occupied.
Collateral
An asset used as security by a financier.
Common Property
Land or facilities owned and used in common by all unit or flat owners, maintained by the body corporate.
Community Title
Allows for separate land ownership with shared interest and responsibility over common property.
Conveyancing
The legal process involved in transferring property ownership.
Covenant
Terms, conditions, and restrictions noted on the title of a property.
Deed
A document executed under seal. For example, a conveyance.
Default
Failure by a party to meet the terms of an agreement.
Density
A measure of the number of buildings permissible for a given area of land.
Depreciation
Reduction in the value of an asset due to wear, ageing, or obsolescence.
Development Approval
Approval from the relevant authority to construct, amend, or change the structure of a property.
Down Payment
The cash paid by the borrower that represents the difference between the sale price and the loan amount (deposit).
Drawdowns
The progressive disbursement of funds from a financier.
Due Diligence
The process of investigation to determine the potential risks of a project.
Easement
A right or interest granted to a third party over a property, such as access for utilities.
Egress
The exit point from a property.
Encumbrance
A claim or lien on a property that may affect the transfer of title.
Encroachment
Part of a structure that intrudes onto neighbouring property or public land.
Equity
The value of an asset less any liabilities (e.g. mortgages).
Fittings
Removable objects that do not damage the property when taken out.
First Right of Refusal
The contractual right to purchase or lease a property before it is offered to others.
Fixed Interest Loan
A loan with an interest rate that stays the same for a specified term.
Fixtures
Items fixed to the property that cannot be removed without causing damage.
Freehold
Ownership of land for an indefinite period of time.
Gazumping
When a vendor accepts an offer, but then sells the property to someone else or raises the price.
Gearing
Using borrowed funds to invest. Also known as leveraging.
General Tax Rule
GST on sales is calculated based on the sale price.
Gross Floor Area (GFA)
The total enclosed floor area of a building. Garages are generally excluded.
Gross Realisation
The total revenue from all items in a project.
Guarantor
A person who agrees to repay a loan if the borrower defaults.
Hectare
10,000 square metres (approx. 2.47 acres).
Holding Deposit
Money paid by a buyer to show serious interest. Refundable if the offer is rejected.
Ingress
The entry point to a property.
Investor
Someone who purchases property for income and/or capital growth.
Jointly and Severally
All borrowers are equally responsible for the loan—even if one fails to pay, the others must cover it.
Joint Venture
A development project undertaken by two or more parties.
Land Tax
A state government tax on land ownership.
Lease
A legal agreement granting tenancy for a set period on set terms.
Leasehold
The right to occupy land or property for a fixed term, without owning it outright.
Lessee / Lessor
Lessee is the tenant. Lessor is the property owner.
Leverage
Borrowing funds to increase potential return on investment. Also known as gearing.
Lien
A legal claim on a property as security for a debt.
Line of Credit
A flexible loan where funds can be drawn up to a pre-agreed limit.
Loan to Value Ratio (LVR)
The loan amount expressed as a percentage of the asset’s value.
Margin Scheme
A GST calculation method based on the margin rather than the full sale price.
Mezzanine Finance
Secondary finance that ranks below senior (first mortgage) funding.
Mortgage / Mortgagor / Mortgagee
A mortgage secures a loan using property. The mortgagor is the borrower; the mortgagee is the lender.
NIMBY
“Not In My Back Yard” – a person opposed to local development.
Nominee
A person or entity acting on behalf of another.
Off the Market / On the Market
Describes whether a property is publicly listed for sale or not.
Off the Plan
Buying a property before construction is complete.
Owner Occupier
The person who buys and lives in the property.
Principal
The original loan amount borrowed (excluding interest).
Private Sale / Private Treaty
A sale made without (private sale) or with (private treaty) a real estate agent.
Purchase Contract
The legal document detailing terms and conditions of a sale.
Rates
Property-related taxes charged by local or state governments.
Rescind
To legally terminate a contract.
Refinance
Replacing an existing loan with a new one, often from a different lender.
Rental Yield
Annual rent income expressed as a percentage of purchase price.
Reserve
The minimum acceptable price at auction.
Reticulation
The extension of utility services to individual lots.
Return on Cost
Development profit divided by total cost, expressed as a percentage.
Rezoning
Changing a property’s permitted use under planning law.
Right of First Refusal
A clause that gives one party the first chance to buy or lease before others.
Scope of Works
Outlines the work to be performed, often part of a quote or contract.
Senior Finance
Primary mortgage finance, usually first registered.
Services
Utilities such as water, electricity, gas, sewerage, etc.
Serviceability
A borrower’s ability to meet loan repayment obligations.
Setback
The distance between a building and the boundary of the lot.
Settlement
Final stage in a property sale—ownership changes and payment is completed.
Site Flicker
A developer who gets planning approval and sells the site without building.
Skillion
A single-sloped roof with no ridge.
Slider
A project where a house is moved to one side of the land to allow subdivision.
Splitter
Dividing one lot into two separate titles.
Strata Plan / Strata Title
Ownership and legal layout of units within a multi-unit property.
Subdivision
Dividing land into separate lots with individual titles.
Subordinate Finance
Same as mezzanine finance—secondary to senior debt.
Survey
Professional measurement of land and boundaries by a surveyor.
Title / Torrens Title
The legal ownership record of property. Torrens Title is Australia’s most common title system.
Unencumbered
Property that is free from mortgages or legal claims.
Unit (Strata)
An individual dwelling within a strata-titled complex.
Valuer
A licensed professional qualified to assess property value.
Variable Interest Loan
A loan with an interest rate that may change over time.
Vendor
The seller of a property.
Yield
The number of dwellings that may be developed on a parcel of land.
Zero Lot Line
When a building is constructed right on the boundary of the lot.
Zoning
Regulations that control land use within specific areas.