Saturday, August 30, 2008

HWT Report

"If inner city apartment living is your thing, there are a couple of alternatives worth your time. For an entry level option, try a one bedder with a carpark and a sale price around the $370,000 to $390,000 mark. The car accommodation can be sold or rented separately for a healthy quick return, or retained to take advantage of further growth. If you looking for owner occupier stock, lower level units in the old Admiralty Towers complex are hard to beat. While they may not have the flash-bang impact of some of the newer high rise projects, your home looks down both stretches of the river with easy access to both the city centre and the wilds of Fortitude Valley. $700,000-odd could be well spent here."


Devine Update

"Devine believes the fundamentals for the housing market in Australia remain sound with a significant and growing undersupply of housing which is evidenced by historically low vacancy rates and rising rents."

French Quarter precinct (Brisbane): Expected commencement: June Qtr. 2009, Hotel/Residential/Retail, Estimated Gross Realisation: $1,200M

Hamilton Harbour (Brisbane ) Expected commencement: Dec. Qtr 2008 / Early 2009, Commercial/Residential/Retaill, Estimated Gross Realisation: $400M


Following ongoing consultation with the Brisbane City Council and the newly established body, the Urban Land Development Authority, which has been formed by the government to oversee the future development of the “North Shore” precinct at Hamilton, progress is being made to secure a development approval on the Devine/Leighton Properties JV’s Hamilton Harbour project. This is situated adjacent to Brisbane’s new cruise ship terminal at Hamilton, an inner suburb of Brisbane. A $400M mixed-use development is planned for the site.

As announced progressively over the last year, Devine has secured a total of six sites that will comprise a precinct to be known as, “The French Quarter”. A multi-staged development including a six star boutique hotel, up-market residential unit developments, an office building and retail space is planned for this prime site. It is located opposite Brisbane’s Botanical Gardens on the corners of Alice, Albert and Margaret Streets in the Brisbane CBD. Following an international architectural competition, a London based architectural firm (Atkins) who were the architects for the world renowned Burj Al Arab hotel in Dubai, were selected for the $1.2B project. They will be working in conjunction with ML Design, a Brisbane based architectural firm. It is intended that a JV be entered into with a third party to develop the site. Work is now progressing to secure a development approval for the staged project to be developed over several years.

99 Mary Street in the Brisbane CBD – A number of options for this site are currently being considered which include possible strata titled office building and a hotel development. Discussions with a particular party in relation to the latter option are currently progressing.

“There is a significant and growing undersupply of housing in Australia which is evidenced by historically-low vacancy rates and rising rents,” Mr Devine said. “Based on this fact and indications that interest rates in Australia might start to trend down in the near future, we expect a recovery of the housing sector although uncertainty remains as to the timing.”

Raptis and Surfers Paradise

There are rumors that Raptis, who is developing the Hilton hotel and apartment complex at Surfers Paradise, is in significant trouble. I wonder if the Gold Coast Hilton will get off the ground?,21985,24252689-664,00.html,21985,24247597-664,00.html

The Gold Coast apartment market is not doing well at present. New apartment are not selling, as existing owners are cutting prices, and rental returns are not good.

"Mr Juniper said Soul would breathe new life into Surfers Paradise. "It's the transformation of the Gold Coast; a brand new Surfers Paradise is being delivered right now," he said. "To have the Hilton being built next door is fantastic. It reassures everyone that Surfers Paradise is still moving ahead in these times at the moment. "They have achieved fantastic sales. We have achieved fantastic sales and it just shows the strength of the Gold Coast market."

He said unlike the Hilton, where sales had been to predominantly offshore interests, Soul had attracted mostly local buyers.

Sunday, August 24, 2008

Ciana At Indooroopilly

I have inspected an apartment at Ciana at Indooroopilly. Although still under construction (completion expected in October 2008), I was pleasantly surprised. I viewed a 2 bedroom 2 bath apartment. It was large -- over 90 sqm internal and a balconey over 30sqm. The layout made the apartment feel large -- a living room in the middle and a bedroom each side. So it had a wide frontage, giving plenty of light. A separate study/utility area. The quality of the kitchen and large bathrooms was high -- with white tiles to the ceiling in the bathrooms. Good views East from the balconey to the residential areas of Indooroopilly. Good location - close to railway, shops, cinema and restaurants.


From India to Noosa

See this article in The Statemen of India.

SL8 Opinion

FKP is selling various apartments at SL8 at West End. These include:

  • Six Skyhomes: 2 storey, 2 bedrooms, 2 bathrooms, priced at $1.165M to $1.195M
  • Two storey ground floor terrace houses, 2 bedrooms, 2 bathrooms, 115sqm internal, priced at $895,000 to $915,000
  • A penthouse with claimed river views, 3 bedrooms, at $975,000.

I am skeptical about this development. Despite having Donovan Hill as the architect, and some larger apartments with large and interesting terraces, in my view, this is a B grade location. It is in an industrial area, and any view will be of industrial sheds and poor quality offices. (Have a look at StreetView in Google Maps.) It is not located on the river. It is a long walk to any shops or restaurants. It is over 2kms to the downtown, so a long walk. No ferry or train nearby. The better view is to the west or south-west, which is not great. Some of the "cheaper" two bedroom apartments, which are less than 90sqm internal, have an internal bedroom -- that is, the windows for that bedroom appear to go to the common hallway and not the outside.

According to the FKP website:

"With more than 90% of 1,2 & 3 bedroom apartments sold limited opportunities remain to invest in SL8 with two bedroom apartment final release now selling from $565,000-$975,000."

When FKP is taken over, I wonder what the new owner will do in relation to SL8.

Saturday, August 23, 2008

Brisbane Apartment Auction Results

  • River City Apartments, Apt 2105, 2 bedroom, 2 bathroom, 1 car, sold at auction for $375,000
  • Aurora Skyhome, Apt 547, three bedrooms, passed in at auction with highest bid of $740,000
  • Charlotte Towers, Apt 1810, passed in at auction with highest bid of $290,000
  • Charlotte Towers, Apt 3811, passed in at auction with highest bid of $310,000
  • Festival Towers, Apt 2806, 1 bed, 1 bath, 1 car - no bid at auction

Friday, August 22, 2008

Matusik on Brisbane Apartments

Recent Matusik reprt on Brisbane apartments is here. Basically, it says that there are not enough apartments in inner Brisbane.

Water's Edge Sales Update

I have tried to ascertain how many Water's Edge apartments at West End have sold. From my calculation, between 30 and 35 have sold, out of about 220 apartments in total. That is not a huge number of pre-sales. Is West End overpriced for what it delivers today?

Tuesday, August 19, 2008

Trilogy Sales

Demolition has started on the site for the Trilogy building in Brisbane.

The building will include a Mirvac managed hotel. Mirvac is not the developer and is not doing the construction. It is uncertain if a construction contract has been signed, and construction finance probably has not been obtained yet.

The hotel component includes 192 strata titled 1 and 2 bedroom suites. These are now in pre-release, with pricing starting at $480,000 and going up to $1M. According to my survey, between 60 and 70 have been sold. The public launch has been delayed, and is likely to be early September 2008. The developer is offering a 6% rent guarantee for 2 years, with settlement due in 2012.

The Compass Points North


Look out Sydney and Melbourne, the exclusive apartments that are planned along the Brisbane River, the Gold Coast and further north are threatening to steal your limelight.


Roseville resident Rhonda Sear knows how to identify a prime apartment in a quality development. This full-time property investor bought a $1,175,000 penthouse in Queensland's South Bank development in 2004 and sold it 18 months later for $1.6 million. Sear has just listed for sale her three-bedroom, two-bathroom apartment in Norman Reach, a $108-million premium development on the Brisbane River at Norman Park.

Sear bought the apartment for $1,739,000 in 2006 and expects to make a profit despite the softer market. "It's an appealing city and it's a lot more affordable than Sydney," she says. "The key is actually buying the prestige product that has a uniqueness because it should still show strong growth in a soft market because it represents a certain lifestyle."

Sear has also spent $1.51 million on a unit on level 55 of Empire Square, Brisbane.

Sunday, August 17, 2008

Look Beyond Headlines

I have always believed that medium price statistics are somewhat misleading. See this story...

"The difference in investor sentiment in the past few months has been extraordinary," Braxton Chase director Andrew Donnelly says. "The first thing many investors approaching us ask now is 'will the market implode?'. Many are clearly having difficulty understanding all the interpretations on where prices are heading."

Braxton Chase believes the reason is the frequent use of average and median price data, which creates a broad impression that prices are falling dramatically, but doesn't reflect localities that might be performing well in terms of capital growth.

See The Australian. 16 August 2008

Devine To Wait

HOUSING and apartment specialist Devine Ltd expects the residential market to fire once interest rates start sliding.

The housing and apartment specialist would pounce on apartment development sites in Sydney once market conditions turned, managing director David Devine said yesterday.

Since Leighton injected $95 million into Devine early last year to buy a 40 per cent stake in it -- since increased to 43.4 per cent -- Devine has been on a site acquisition spree, building a land bank to develop 10,000 homes in Melbourne, Adelaide and Brisbane. So far, it owns nothing in Sydney.

"Obviously, we'd be looking at the Sydney market for medium density and any opportunities that come up there," Mr Devine said. He did not think property values had any further to fall, and said residential markets nationally were "very much undersupplied". "Vacancy rates are below 1.5 per cent in most markets and according to BIS Shrapnel, we are very much undersupplying the market," he said.

"The stock deficiency is higher than it has ever been and with overseas migration at record levels, we see the residential market improving dramatically."

See The Australian, 15 August 2008

Saturday, August 16, 2008

Google Insights

Google has an interesting service, that allows you to see what people are searching for on Google.

It is called Google Insights. It is helpful when making investment decisions.

For example, when looking at searches conducted in Australia over the past 12 months, the following are relative rankings of various searches:

trilogy brisbane
mill albion
empire square
westin brisbane


new farm
west end
st lucia

Friday, August 15, 2008

Auction in Quay West

Apartment 905 in Quay West went to auction - 1 bedroom, 1 bathroom, 1 car, furnished. 72sqm, 9th floor with park and river views.
Highest bidder was $445,000.
Now listed for sale at $470,000.

Brisbane Rates Website


Brace for the BOOM!

Monday, August 11, 2008

That’s the front cover headline of the September 2008 issue of Your Investment Property magazine. BIS Shrapnel predicts Brisbane will grow faster than any other capital city with the median house price to jump from the current $422,000 to $515,000 by June 2011. That’s a huge 22% increase in just 3 years!

Underpinning this strong growth forecast are several key factors:

• supply and demand – last year 90,000 people migrated to Queensland from interstate and overseas. Approximately 44,000 new dwellings need to be built next year to accommodate this rapid growth, however, only 33,000 are expected to be constructed, resulting in a shortfall of 11,000 new homes
• higher rental yields – rents have risen 15-20% during the past 12 months. Independent property analyst Michael Matusik predicts rents will rise by a further 17% in the next 18 months
• lower interest rates – we should see the first official rate cut in a month or two, with several more reductions to follow during the next two years

The bottom line is that regardless of whether you are buying as an Owner-Occupier or Investor, now is the time to secure your next property before prices take off again!

- Brian White, Senior Property Consultant, Prime Property Sales (Qld) Pty Ltd

What Brisbane Buyers Want

"Brisbane property buyers are willing to pay a premium to live closer to good schools, fancy restaurants and public transport nodes, according to one analyst.

Australian Property Investor magazine has identified the six ingredients of prime real estate, being an attractive view, proximity to water, heritage appeal, an inner-city location, lifestyle options and amenity."

See Brisbane Times

Stockland Results

"Short term weakness in Residential; to rebound strongly in medium term"

In 2007/08 FY, Stockland sold 225 apartments Australia wide, for a total of $212M, at an operating profit of $11M or 5%.

Monday, August 11, 2008

RP Data Rismark Update

Property Value End of Month Index Release, 31 July 2008

"Most markets fall slightly in value through winter but U.S. experience won’t happen here. The RP Data/Rismark International end of month property indices report released today confirms what most people know to be true already; we are seeing modest declines in most property markets. However, RP Data National Research Director Tim Lawless said that the good news for buyers is that property is not a homogenous market and if you look at the flipside of this downturn, it may well prove to be the ideal buying window as speculation that interest rates may stay on hold and rents continue to surge.

Brisbane Property Market
• Brisbane house values have fallen on average 2% and 0.2% for units over the last six months, versus an average rise of 7.5% over the past 12 months.
• Prices of home units in the inner and south eastern suburbs have held and in many areas risen as prospective buyers choose a unit over a house due to affordability."

BIS prediction

Mr Mellor said home buyers should not expect a big decline in prices by the end of the year. "There may be a fall in prices before the end of the year, but it won't be more than 1 or 2 per cent," he said.

He added that it was a good time for buyers looking to upgrade to a bigger home.

"With a 10 per cent increase in the amount of people looking to rent, a figure that is expected to increase, it is a great time for investors." The financial markets are factoring in an interest rate cut, possibly as early as next month, but even without it, Mr Mellor predicted an upturn, so long as rates did not rise again.

"Common sense will win out in the end," he said. "Buyers will realise that all the fundamentals that make it a good time to buy are there."


Will Empire Square Get Built?

There was an interesting story in The Australian last week, but states that the Empire Square development in Brisbane has not yet obtained construction finance. Also, no construction contract has been signed. The developer says:

"The worst possible scenario for Empire Square would be that if it didn't start by the end of the year, for whatever reason, we would be left with half an acre in the CBD that could be rented out for the next two or three years," Mr Chopard said.

Saturday, August 9, 2008

Population Growth

The Australian had an interesting article by Bernard Salt on population issues and the impact on Australian housing.  Click here for article.

Monday, August 4, 2008

Empire Square - presales

"Located from level 47 up, the 98 two-and three-bedroom apartments are priced from $1.3 million and marketed as having full access to the services of the building's Westin Hotel.

The residential component also includes six penthouses priced from $4.5 million.

Metacap Developments insists there has been no shortage of interest in the $500 million development, which also includes 306 hotel suites and 23,000 square metres of commercial space.

Expressions of interest were placed on 80 per cent of private apartments, before sales officially opened yesterday.

"We have already been inundated with enquiries... (this) is a great result, particularly given current market conditions," company director Jerome Chopard said.

Empire Square will also feature 306 hotel suites and a range of five-star facilities, including a gym, pool and restaurant.

Permanent residents will have access to the full services of the hotel, including the concierge, maid, doorman and personal assistant."

From Brisbane Times, 30 July

Is it the time to buy in Brisbane?

From the Brisbane Times:

"The sharemarket's loss might be the Brisbane property market's gain, as spooked investors return to the relative safety of bricks and mortar.

Experts are predicting a pick-up in real-estate activity following the sharemarket's recent dive during which overnight losses have cost investors in the millions of dollars."