Thursday, July 31, 2008

Too Many Expensive Apartments in Brisbane

Saturday, July 26, 2008

Find Me A Home

Residex have launched a new service, FindMeAHome.

From my quick review, it is not very user friendly or accurate.

Using a map interface, it lists properties for sale. First, the list is not comprehensive. Second, it lists properties for sale that have been sold.

When selecting a property, it gives an indicative value. For the apartments that I looked at, the indicative value is not very accurate.

For example:
  • A two bedroom apartment in Quay West - indicative value given as more than $1,348,000. This apartment would be, at best worth in the $800,000s.
  • A one bedroom apartment in Charlotte Towers - indicative value given as more than $731,000 to $837,000. This apartment would be, at best worth $400,000 (most likely $360,000.)
  • Casino Towers, Apt 3702, indicative value given as more than $1,166,000. This apartment recently sold at auction for $705,000.
There are many other examples, including for suburban houses. John Edwards has clearly got this wrong.

Regional Queensland - from RP Data Property Pulse

Cairns – listings currently sit at a level 25% higher than the same period last year, this result represents the greatest annual increase in listings across the period 2005 to 2008.
Townsville - listings have increased by 34% during the last year, the greatest annual increase in listings during the last three years.
Sunshine Coast – listings have recorded an increase of 4% during the last 12 months, which represents the smallest annual increase in listings at any time between 2005 and 2008.
Gold Coast – listings have increased by 390 or 24% over the last 12 months which represents the greatest annual increase in listings during the last three years.

All highlighted Queensland regional areas except for the Sunshine Coast have recorded their greatest percentage increase in listings during the last year which suggests the level of stock on-the-market far outweighs the number of buyers currently in the market.

These results again highlight that Australia is in the midst of a buyers market. For those who have the capacity , there is a large amount of stock on the market and few buyers. It is felt that the best window of opportunity to buy will be during the next six to nine months with purchasers continuing to be in the best possible position to negotiate as supply in the market far outstrips current demand.

Tuesday, July 22, 2008

Waterfront Newstead Update

From a letter from Mirvac dated July 15, 2008:

46 of 99 apartments in Pier North and Pier South were under contract prior to public release on June 21, and 9 more sold since.

Prices achieved ranged from $1.98M to $14.25M.

Available apartments priced from $2.15M to $4.75M and penthouses from $6.4M to $8.9M.

"Park" apartments to be released in mid-2009. Prices expected to start from $800,000.

Monday, July 21, 2008

Update: Hamilton Harbour

Saturday, July 19, 2008

Charlotte Towers in Brisbane

Talking with agents in Brisbane City, it appears that apartments in some buildings are selling quickly and at good prices, while in other buildings the prices are not holding up. One building in distress appears to be Charlotte Towers.

This building has about 400 apartments, and was first sold off the plan by Devine in 2004. It now has become apparent that many of the original prices for Charlotte Tower apartments were too high.

For example, at present this appears to be the price range for apartments selling in Charlotte Towers:
  • 1 bed, 1 bath, no car: $280,000 to $320,000
  • 1 bed, 1 bath, 1 car: $330,000 to $380,000
  • 2 bed, 1 bath, 1 car: $380,000 to $420,000
  • 2 bed, 2 bath, 1 car: $400,000 to $460,000

Just recently, apartment 1707 (2 bed, 2 bath, 1 car) sold for $400,000.

There are many apartments for sale in Charlotte Towers.

My advice is never to buy in a building with more than 200 apartments.

SouthBank 2026

Tuesday, July 15, 2008

South Point at South Bank - prerelease

"The soon to be released Southpoint Residences will be the finest and most exclusive of Brisbane’s property market. Situated on South Bank’s last development site, the north-east aspect ensures that your views of the city and the river set you ahead of the rest.

With fifty-six palatial residences perched on top of the next acclaimed Emporium Hotel, you will not only live in the style that you deserve, you will receive six-star treatment morning, noon and night.

These truly unique ‘homes’ will provide spacious living with only the very best of fixtures and finishes. From the ‘his’ and ‘her’ robes to the classic fireplace and the private bar each element has been carefully selected with your comfort in mind.

Southpoint will be delivered by the Developers who brought you the Emporium Precinct; the Anthony John Groups’ attention to detail achieves quality and a lasting sense of style."
Renders here and here

River City - Oaks

Click on letter to read

Monday, July 14, 2008

Hale Street Bridge

The new Hale Street Bridge (or Link as the Council calls it) has a fly-over on Coronation Drive. Will it impact the views of Coronation Residences and Vue?

It will increase traffic on Merivale Streets and Cordelia Streets in South Brisbane. I would not buy an apartment on these streets.

"The revised plan, which was passed by Brisbane City Council at a special meeting today, includes an overpass from the Riverside Expressway to Coronation Drive at a cost of $55 million, and removes the need for outbound traffic to queue at an intersection.

"This will allow outbound traffic from the city to proceed to the west along Coronation Drive by going up and over southbound traffic," Cr Newman said.

Original projections found the construction of the bridge and link would add an additional 40 minutes to peak-hour commutes during 18 months' of work."

See Brisbane Times.

See also

Sunday, July 13, 2008


Michael Yardney, who headlines the PropertyUpdate website and report, and is a director of Metropole Projects, has this to say:

Not all real estate markets in Australia are doing well, Yardney says. "We've got a very two-tiered market: inner suburban, or close to the water is doing well; and a lot of the high-rise isn't, off the plan isn't, and outer suburbs are not doing as well."

Yardney is talking to currently New Zealand property investor groups about strategies. "You're really early into what's probably going to be a three or four year slump," he says, but adds that the end of a boom doesn't necessarily mean a crash.

The "scary thing," Yardney says, is most current property investors haven't been in the market for more than four or five years, so they've never lived through a property cycle - they don't know what to expect. He says interest rates will drop, "but when market sentiment has been knocked by a number of things, people won't instantly come back - it's a herd mentality".

Smart investors will invest counter-cyclically, but ensure they have a buffer to see them through difficult times. "There's a huge oversupply of certain properties - you've got lots of apartments, developers have a lot of stock and houses aren't selling, so rents may not keep rising."

Yardney says people shouldn't get carried away by negativity - opportunities remain - and should stay positive.

See New Zealand Herald

Clouds Gathering

Extract from Courier Mail website (13 July 2008):

HOUSE prices are falling in the US, Britain, Spain and western Sydney. Could Brisbane be next? There is a precedent. In 1995 the median house price in Brisbane slipped 2 per cent. And in the first five months of this year it crept up a mere 1.8 per cent, according to property researcher RP Data. ...

Some Brisbane agents are eyeing the market with a hint of trepidation. John Johnston, chief executive of Toowong agency Johnston Dixon, says sentiment is very, very low. "Auction clearance rates this year have been only 30 per cent and that includes sales before the event. More sales are crashing during the (seven-day) cooling-off period than I have ever seen in 20 years in real estate in southeast Queensland."

Brisbane property analyst Michael Matusik said it would only take another quarter of a percentage point interest rate rise by the Reserve Bank next month to trigger a fall. "Prices would come back 5 per cent for a quarter or two and then start to rise again," he said. "And if interest rates went up more than once, there would be a 10 per cent correction."

Philip Parker, chief auctioneer for the state's biggest real estate firm Ray White, said that "what has to fall is people's expectations, not the value of properties. We've done sales of property for less than people were offered four or five months ago, but equally we've done them for more. In any market there will be people who buy a place for $500,000 and find that if they want to sell it a year later, they have to accept less."

Both Mr Johnston and Mr Parker fear the consequences if official interest rates were to reach 10 per cent, compared with the 7.25 per cent at present. ...

"If official rates reached 10 per cent that would be the equivalent of the high teens of the Keating era because people borrow so much these days," Mr Johnston said. "A repeat of 1995 is not out of the question, but the big difference is that then we had an incredible surplus of houses being built. Right now there is big deficit."

The Housing Industry Association estimates that there will be 43,700 housing starts in Queensland this year, 4900 below that required to meet demand.

RP Data's national research director Tim Lawless doesn't see prices falling in southeast Queensland but "we expect the market to remain relatively flat as long as there's a high-inflation environment. Any sign of inflation easing will be the cue for investors to become more active in the market. We think this is likely to happen during the first six months of next year."

Real Estate Institute of Queensland managing directors Dan Molloy said slowdowns in the market in the past 20 years had generally followed interest rate rises or economic uncertainty.

But the Queensland market was fundamentally strong.

"Elements such as our strong population and economic growth, as well as a burgeoning resources sector, have ensured its resilience," he said. "As with previous economic cycles, these elements combine to minimise any negative impacts." But barring further interest rate rises, Mr Matusik forecasts price growth of 8 per cent this financial year, although most of it will occur in 2009.

Any drop in prices would be welcomed by those trying to enter the market, but the benefit would probably be illusory if it came at the cost of higher interest rates. The most recent Real Estate Institute of Australia figures found that Queenslanders needed more than 40 per cent of median family income to service the average new home loan.

Valuer's Report

Herron Todd White's July Month In Review Report includes the following about South East Queensland:


"Our sunny market outlook has greyed somewhat after recent rate rises. The mixed signal from commentators has put a large percentage of investors on the back foot. A portion of those in the know continue to sing the South-East QLD song of praise, hitching their star to our increasing population and seemingly boundless potential, but other equally wizened souls note we are getting a bit big for our boots. Buyers do not have bottomless pockets, they venture, and the market is due to check itself. The confusion has also been noted by agents who are seeing different sectors performing at different speeds with no clear cut idea of how it will all pan out. ...

Historically, Brisbane has not been susceptible to dramatic market fluctuations, which means most punters are able to bear the brunt of change. This time may be different, however as the recent boom has been unprecedented for most and unless smart, developers may find the landing more bumpy than expected."

Brisbane apartments:

Rental Vacancy: severe shortage of available property relative to demand
Rental Vacancy Trend: Tightening
Demand for New Units: Fair
Volume of New Unit Sales: Declining
Stage of Cycle: Peak of Market
Are New Properties Sold at Prices Exceeding Their Potential Resale Value: Frequently

Gold Coast

"Market conditions have slowed on the Gold Coast in the past 3 to 4 months, with agents generally reporting subdued levels of enquiry. Some agents have proposed that there has been as much as an arbituary 10% drop in market values which would almost cancel out gains achieved during 2007. It is difficult to ascertain the extent of the slowdown in the second hand property market with the reduced turnover of sales. Some sectors still continue to perform or hold their ground in light of the underlying economic issues. A good indicator of the market slowdown is the performance of new unit complexes, townhouses, and house/land packages. Marketing agents have reported a significant drop in buyer enquiry. Subsequently rates of sale have fallen. Developers are now in a position where they are offering incentives to “prop up” the fall in rates of sale.
Those that purchased off the plan in 2006/early 2007 to speculate on a new high-rise unit project, are now only realising that their purchase was in vain. Should they forego their deposit, the unit goes back into the sales pool further placing pressure on supply."

Gold Coast apartments:

Rental Vacancy: balanced market
Rental Vacancy Trend: Steady
Demand for New Units: Soft
Volume of New Unit Sales: Declining Significantly
Stage of Cycle: Declining Market
Are New Properties Sold at Prices Exceeding Their Potential Resale Value: Frequently

Sunshine Coast

"We also are seeing incentives being offered and the return of ‘extraordinary marketing techniques’ to non-locals to help sell unit projects. Rentals for both houses and units remain strong and underpin demand with no suggestion that this is going to ease. Punters must also be concerned with the fluctuations in the stock market and some will transition back into property where there is strong rental support and long term potential for capital growth."

Sunshine Coast apartments:

Rental Vacancy: shortage of available property relative to demand
Rental Vacancy Trend: Tightening
Demand for New Units: Soft
Volume of New Unit Sales: Declining
Stage of Cycle: Bottom of Market
Are New Properties Sold at Prices Exceeding Their Potential Resale Value: Occassionally

Saturday, July 12, 2008

Meriton on Adelaide Street

See Brisbane Times article

"...Meriton last week resubmitted plans for a new 250m building, to be constructed on the corner of Adelaide and Macrossan streets, which it describes as "tall, slim and elegant".

The tower's facade comprises grey-coloured glazed windows broken up by "continuous vertical elements" and horizontal perforated metal screens, according to Meriton's new development application.

Large expanses of clear glass on lower levels will create a colourful and active footpath space, the developer said. It plans to include street-level retail space for restaurants and cafes.

The highrise tower will combine a mixture of serviced and residential apartments, while a three-storey podium will include commercial space.

The building will also boast a 10-level basement car park that is tipped to require one of the biggest excavation efforts in the city's construction history...."


Colliers March 08 Apartment Report

Colliers has released its March Quarter 2008 Brisbane Apartment Report.
It is available from the Colliers Research page, updated here.
The introduction states:
"The Inner Brisbane unit market started the March 2008 quarter with one of the lowest supplies on record. Less than 500 new apartments were available for sale spread across 24 projects. Only 78 sales were made during the quarter. While this is the lowest figure on record, this is largely due to the very low number of apartments available for sale.
There were no new project releases during the quarter. Apartment prices continue to increase, showing demand is still present. Buyers seem to be holding off, waiting for something new to inspire a return to previous sales levels. And they don’t have long to wait, with a number of large, innovative projects currently in planning for the Inner Brisbane area. Meanwhile, the average cost of a new apartment continues to rise, showing demand is still strong for high quality inner city dwellings. New apartments selling in the March 08 quarter achieved an average sale price of $894,000, an impressive 23% higher than the December 07 quarter. Part of this can be attributed to the fact that most existing projects have seen the highly popular low-cost apartments sold in previous quarters, leaving the mid to high end apartments in the market. General market apartment sales were very buoyant during 2007. The inner city residential market now numbers around 48,000 apartments of different sizes, types and ages. There were 4,883 apartment sales in Inner Brisbane in 2007. Some 3,485 of these apartments were priced under $500,000 (71.3% of all sales), and 244 were over $1 million. There are 34 new projects pending which could possibly equate to over 6,000 apartments."
The Australian Financial Review had an article on Wednesday this week, titled: "Low Supply Powers Brisbane Prices."
The revamped Colliers Report focuses on new projects. So take care with the $894,000 figure and "low supply" reports, as this only relates to new stock. The medium price of "second hand" apartments is lower, and there are plenty of apartments for sale.
For new stock, what is left for sale is mostly apartments that are overpriced or the worst apartments in the building. So this is not selling. People are waiting for new releases, and there are a number of projects in presales - Trilogy Towers, Empire Square and Waters Edge for example. This is what people are buying, not the left overs.
Good apartments that are not too small, in good buildings, with never to be built out views, are selling at good prices for vendors. Apartments in buildings of more than 200 apartments or that are managed by Oaks are struggling.

Recent Sales in City

Casino Towers, Apartment 3702, Level 37, 2 bedrooms, 2 bath, study, 2 car spaces, 125 sqm, probably the best position in the building, sold at auction by Chris Hinds for $705,000

Aurora, Apartment 419, level 41, 2 bedrooms, 1 bathroom, 1 car, great views, sold for $485,000

Petrie Terrace Development

New website for Petrie Terrace redevelopment. Originally, this was to have apartments, but now just retail and cinema. See

Sunday, July 6, 2008

More Construction in Brisbane

Always be careful th at your view will not be blocked out! Some recent photos:

Three bedroom apartments in Skyline will be impacted by Macrossan being built next door:

Some apartments in Aurora will be impacted by the taller Trilogy :

Rents to Rise?

"... Meanwhile, Brisbane rents are predicted to increase by $45 per week in the next 18 months. This is due to a shortage of rental properties, the rise in interest rates and higher than expected rates increases.

Dan Molloy, managing director of the Real Estate Institute of Queensland, said that tenants in high-end units will pay the highest price following the rates increases handed down in the recently announced Brisbane City Council budget. “With vacancy rates at historical lows and tenant demand remaining high, further upward pressure on rentals is almost inevitable” he said.

The undersupply of new housing and rental accommodation is unlikely to be relieved in the near future and it is expected to be three to five years at least, if not longer before there is any substantial change to supply."

From ARPP June Newsletter.

Recent Sales

Casino Towers, Apartment 3702, Level 37, 2 bedrooms, 2 bath, study, 2 car spaces, 125 sqm, probably the best position in the building, sold at auction by Chris Hinds for $705,000

Aurora, Apartment 419, level 41, 2 bedrooms, 1 bathroom, 1 car, great views, sold for $485,000

Saturday, July 5, 2008

The Mill at Albion Goes on Public Sale

Housing Market Flooded in Brisbane, but Few Buyers

From The Courier Mail, 5 July 2008:

"STRESSED home owners and investors are flooding the market with thousands of houses but agents say they can't find any serious buyers for some properties.

As home mortgage lending in Queensland dives for the second consecutive quarter, the number of houses for sale is up 150 per cent compared with the same time last year.

There were 4750 new listings added this week - 1842 in Brisbane.

Almost 40,000 residential properties are listed for sale across the state, compared with 15,900 last year.

Auction clearance rates are suffering in the slowdown.

At yesterday's Ray White's corporate auction, just one of 11 properties was sold under the hammer. The three-bedroom unit in Casino Towers sold for $705,000.

It was a similar story last week, when 12 properties were put to market, and only one - a Norman Park home - was sold for $840,500.

The marketing agent for a prime residential site near the Brisbane River said a recent auction of the property failed to get any bids.

And the one buyer who showed some interest had now gone cold.

"Just finding anyone interested has been a problem - last year there would have been a handful," the agent said.

At yesterday's auction chief auctioneer Philip Parker said he was surprised when just two early bids were heard for an inner-city house.

"It's good real estate - you'd think you'd have more (bids) than that," he said...."

River Plaza Auction Results

River Plaza, 21 Dock Street, South Brisbane
Auction, Saturday 29 June 2008

Apt 33
Three bedroom apartment, 8th floor, excellent views of river and city, apartment needed renovation
Reported as sold at auction for $685,000

Apt 26
Two bedroom apartment, reported as sold at action for $555,000

Thursday, July 3, 2008

Meriton's Adelaide Street Tower

Meriton's large skyscraper for Adelaide Street in Brisbane has been redesigned. It is located next door to the Macrossan Apartments (under construction) and Skyline.



More details here.