I'm new to Android Studio and I built a project from Github with an included gradle.properties file.
If I hover over "org.gradle.jvmargs=[...]" it says "Unused property". A comment in gradle.properties says
IDE (e.g. Android Studio) users: Gradle settings configured through the IDE will override any settings specified in this file.
In the Settings dialog, look instead under
Build, Execution, Deployment >
Compiler - there's a
Command-line options box there - I think that is where you override settings now. It's empty by default though so unless you've set something there, it wouldn't be overriding other settings. It's a per-project setting - you can also change your defaults for all projects by editing user settings files - described here http://tools.android.com/tech-docs/configuration.