Wednesday, January 16, 2008

M on Mary

Admiralty One - Two Bedroom

Apartment 101 in Admiralty is listed for sale at $610,000. This is one of the apartments at the back of the building. Two bedrooms, two bathrooms, one car. This same apartment was listed for sale with the same agent in October 2006 for $450,000. Now thats a good capital gain!

Monday, January 14, 2008

Two Bedroom Apartments Above $800,000 in Brisbane City

Some recent sales (all two bedrooms)

  • Parklands, Apt 6042, $875,000
  • Felix, Apt 377, $950,000
  • Quay West, Apt 1901, $850,000
  • Quay West, Apt 2006, $830,000

Some listings (all two bedrooms)
  • Casino Tower Penthouse, $1,300,000
  • Riparian Plaza, $2,200,000
  • Quay West, Apartment 606, $800,000
  • Evolution, Apartment 52 (level 5) (77sqm internal), $958,000
  • Evolution, Apartment 166 (level 16) (89sqm internal), $868,500
  • Evolution sub penthouse, Apartment 323, $1,640,000
  • Evolution, Apartment 344, $1,740,000
  • Evolution, $850,000
  • Admiralty Towers Two, $815,000
  • Admiralty Quays, $880,000
  • Parklands, Pinnacle, 9th floor, $1,050,000
  • Parklands, Pinnacle, 6th floor, $975,000
  • Quest River Park Central, 29th floor, $1,400,000
  • Grosvenor on Edward, $1,100,000

Saturday, January 12, 2008

Devine's Plans for Alice Street

As reported in the Courier Mail in late December 2007:

BRISBANE is about to get its most expensive apartments, as local developer Devine prepares to launch a French-inspired project boasting units priced at up to $15 million.

The price tags will far exceed the $12.36 million being asked for apartments in a proposed Kangaroo Point development, Scott Street, unveiled earlier this year.

Property records reveal the highest price paid so far for a Brisbane apartment was the $7.37 million shelled out for the penthouse in Riparian Plaza, while several units at New Farm and another at Hamilton have all topped $5 million.

The yet-to-be-built Vision tower between Mary and Margaret streets has a two-level apartment that sold for $3.89 million.

Penthouses in Skyline, on Macrossan St, are expected to bring $5 million-plus.

Devine managing director, David Devine believes the Brisbane market is ready to accept apartments of this value.

The apartments will be part of a French Quarter precinct on sites Devine owns on the corner of Albert, Alice and Margaret streets in the city heart.

The first stage will feature a tower with a luxury six-star hotel, the apartments on top, retail and commercial space on the lower levels and Parisian-style cafes and walkways.

An international design competition for the building has been whittled down to a shortlist of three.

Devine marketing director Ken Woodley hopes a final decision will be made on the design early in the new year.

He said there would be 70 to 90 residential apartments above the hotel on the Alice St site. These would range from 300sq m to 800sq m and cost $2.5 million to $15 million.

Mr Devine said while there would be only one penthouse, luxurious sub-penthouses were expected to fetch $12 million to $15 million. Another international competition will be held to design the interiors of the apartments, which Mr Devine said would feature the highest quality finishes available.

The building will incorporate the latest in "technomenities" – the latest generation smart home technology.

This will include automated systems for lighting and climate, in-home entertainment and electronic concierge services.

Mr Woodley hopes work will start on the development in the second quarter of 2009, with completion in late 2012.

Tuesday, January 1, 2008

What will 2008 have in store for the Brisbane apartment market?

First, how did the Brisbane apartment market do in 2007?

The results were mixed.

It is hard to get reliable information about "the state of the market" when looking at inner city apartments in Brisbane. Agents only seem to remember the last two weeks -- if they made some good sales in the past 2 weeks, then the market is booming; if they didn't get new listings or a contract collapsed, then the market is heading towards a bust.

Information providers, such as RP Data and PRDColliers, have good information, and this information is often used by the media to make general conclusions. However, general conclusions are often not useful when considering a particular apartment building or apartment.

Capital Gains

Some apartment buildings did very well, and others did not. Overall, a good building had at least a 10% capital gain in 2007.

The buildings that had good capital gains include:

• Riverplace, where the average 2 bedroom apartment increased from about $500,000 to over $600,000.
• Admiralty Two, where 2 bedroom apartments increased from about $650,000 to $720,000 (with one now listed at over $800,000).
• Quay West, with a 2 bedroom apartment selling to a senior Devine employee at auction for over $800,000.
• Metro 21, with high floor 2 bedroom apartments increasing from less than $460,000 to more than $500,000.
• Arbour on Grey, with 2 bedroom apartments now in the low $700,000 range.

Buildings that have been disappointments include:

• Charlotte Towers and Festival Towers - with Oaks taking over management. Many developer apartments still remain for sale in Charlotte Towers. Investors who purchased off the plan have had a hard time getting good prices on resale, with over 800 pokey poor quality student apartments in these two buildings, where the views will likely be lost as buildings grow around them and there will always be competition amongst sellers.
• Casino Towers, also taken over by Oaks, and with North Bank plans taking out the river views.
• Aurora, a poor quality ghetto building.
• Vue, at Milton, with apartments that sold off the plan in the mid $700,000s reselling at auction in the mid $500,000s.
• Koko, that still has not sold out, and the complex feels like a ghost town. The developer overpromised and under delivered.


Rents increased, and vacancy rates dropped in 2007. But the overall rental market is not as good as many newspaper articles suggest. The poorer quality buildings are full of students, often with 6 people living in a 2 bedroom apartment, on a rent subsidised by the developer who promised the first owner a rental guarantee. Many apartments are occupied by corporate renters (such as Accenture, engineers working on the tunnel, etc) who are willing to pay high prices for new furnished apartments; but this demand will not continue indefinitely. Some buildings, such as those managed by Oaks, are turning apartments into hotel rooms, thus reducing supply. Although December is not the best month to find tenants, there are many empty apartments in Brisbane awaiting tenants. Skyline and Koko, for example, have many empty apartments.

Although rents increased in 2007, the rate of increase slowed towards the end of the year. It is now hard to find a good unfurnished two bedroom apartment for rent in the inner city for less than $550.

Predictions for 2008

Quality inner city apartments in Brisbane will do well in 2008. Capital growth will continue, and vacancy rates will remain low. Reasons for this include:

▪ Brisbane population will continue to increase.
▪ International students still regard Brisbane as a desirable location.
▪ There are many infrastructure projects in Brisbane, requiring professional staff to work in Brisbane.
▪ Traffic will get worse, and many young singles and families will want to live in quality accommodation close to work and other facilities.
▪ It is becoming more acceptable and desirable to live in an apartment in Brisbane.
▪ The U.S. subprime problems will have little long term impact in Brisbane.
▪ There will be few new buildings entering the market in the next two years. M on Mary and Evolution, both second tier buildings, will be complete in 2008. That's about it. There are only six buildings listed on in the developers section for the CBD, and four of these are completed buildings (Vue, Trilogy, Pinnacle, Skyline, The Hub, Evolution). It does not look like any new buildings will be ready in 2009. There will be new buildings for which marketing will commence in 2008, but these buildings will not be ready until at least 2010.

So here are some predictions for 2008:

• The price of a good quality 2 bedroom 2 bathroom apartment in Brisbane, with views, will be at least $800,000.
• The price of an average quality 2 bedroom 2 bathroom apartment in Brisbane will reach $650,000.
• By the end of 2008, it will be hard to find any modern inner city apartment in Brisbane in a good location for less than $600,000.
• New off-the-plan 2 bedroom apartments (for buildings where marketing commences in 2008) will start at $800,000.
• Average rent for an unfurnished 2 bedroom apartment will jump midyear to $620 per week.
• There will be more buyers than sellers.
• There will be more action in the inner suburbs than in the city. Prices for quality apartments in areas such as Indooroopilly and Toowong (where there is a train station and regional shopping, close to education facilities) will boom. By the end on 2008, it will be hard to find a good quality 2 bedroom apartment in these areas for less than $600,000.
• Noosa and Mooloolaba will rise again, as people looking in Brisbane for investments will see good value in the northern beaches, particularly beachfront apartments.
• 2009 will be better than 2008.

If you find any of these predictions hard to believe, for some buildings they are already true. For example, today:

• Small Off-the-plan 2 bedroom apartments in Brisbane, in Evolution, at 75 sqm, are selling for over $650,000.
• Two bedroom apartments are selling in Quay West, Arbour on Grey, Admiralty One and Admiralty Two for more than $700,000.
• Trilogy, in Spring Hill, has two bedroom apartments (less than 80 sqm, but with views) listed at more than $600,000. [However, a number of contracts have fallen through, as the valuations have come back $40,000 or so less than contract price.)
• New two bedroom apartments with river views in West End and Milton (e.g. in Flow and in Coronation Residences), which are not prime locations, are selling for more than $900,000.
• Off-the-plan apartments (two bedrooms, at least 85 sqm) are selling in quality developments in Indooroopilly, Toowong and Sherwood today for well more than $550,000.
• People have signed contracts for 2 bedroom apartments in Vision (e.g., level 35, 120 sqm) for more than $1,000,000. Settlement, if this building ever gets off the ground, will not be until 2011.
• The price range for a large 2 bedroom apartment in Mirvac's Tennyson Reach is $900,000 to $1,100,000. Settlement in 2010.
• Off-the-plan 2 bedroom apartments in Soul on the Gold Coast are, at a minimum, $1,800,000. Settlement not at least until 2011.

So I will not be selling in 2008.