Thursday, October 30, 2008

Rates Ripoff in Brisbane

CITY Hall will drag five times the amount of general rates out of Kelvin Grove Urban Village this financial year.
Information released by Brisbane City Council after a question with notice shows some inner city buildings will collectively pour 400 per cent more in general rates in to the city’s coffers than last year, with Kelvin Grove Urban Village facing the biggest rise. The Village’s 213 unit owners paid a total $83,411 in general rates to council in the previous financial year, the information shows. But this will jump to $443,750 for the 2008/09 financial year after changes are introduced in January, designed to increase rates for some of the city’s most expensive inner city apartments. The changes, which take effect in January, will lift the general rate for the average unit owner in the Village from $392 last financial year to about $2100 for this financial year. But just a fraction of those living in the Village are owner-occupiers, meaning all but 23 units are owned by investors.
Other addresses to be hard hit by the new ``parity scheme’’ include the Parkland Boulevard building in Brisbane’s CBD, which will collectively pay 364 per cent more in general rates than last year, increasing the building’s total contribution to $753,000. The building contains 168 owner occupied units and 232 investment units.
Council will collect 300 per cent more in general rates for the year from Riverplace Apartments in Brisbane, where 76 of the building’s 314 units are owner occupied.
Owners of units in Admiralty Towers II in Queen Street will fork out 310 per cent more than last financial year.
Riverscape West unit owners in MacDonald St, Kangaroo Point, face an increase of 150 per cent over last financial year.
The information shows just under 1000 owners of units in 116 inner-city apartment blocks will together boost council’s kitty by $6.3 million this financial year under the changes, representing a 127 per cent overall increase for the addresses.
Central ward Councillor David Hinchliffe (Labor) said the changes would take a toll on residents of Kelvin Grove’s Urban Village, which he said was ``not the most salubrious address.’’ Cr Hinchliffe said the impact on unit owners would be about an 800 per cent increase from one quarter’s rates bill to the next.
But council Finance chairman Adrian Schrinner said the information put to rest once and for all claims people were facing 1000 per cent rises in their rates bills. He reiterated a previous commitment to issue letters to unit owners showing the individual increases they face ahead of the January changes.
See City News

Saturday, October 25, 2008

Soleil Tower Sales Launched Today

Meriton's Soleil, its first building in Brisbane, launches this weekend. (Completion of the building is planned for 2011 or 2012.)

It will be 74 levels, and 234 metres high, located at the end of Adelaide Street, behind Skyline and next door to Macrossan (which is under construction).

Floors 31 to 64 contain the apartments that Meriton will sell. Floors 65 to 74, comprising 42 apartments, are not for sale. Floors 30 and below will probably be 175 serviced apartments, owned and managed by Meriton. A total of 188 apartments will go on sale this weekend. They are 1 to 3 bedroom apartments. The 2 and 3 bed apartments have 2 bathrooms, and an underground carpark (up to 10 levels below Adelaide Street level).

On the higher floors (above level 41), there are five apartments per floor. There are 3 elevators for about 220 apartments, which is not a great ratio. (Admiralty Two, just nearby, has 191 apartments and six elevators.)

None of the apartments have balconies. Airconditioned, full length windows, and floor to ceiling tiles in the bathroom. Indoor pool and gym.

Here are some example two bed, two bath apartments:

Apartment 6001, level 60, views south down the Brisbane River over the top of Skyline, 79 sqm and 1 car park. Listed for sale at $823,000, which is about $10,400 a sqm.

Apartment 4205, level 42, limited views between Admiralty Quays and River Place, but good views over All Hallows, 83 sqm and 1 car park. Listed for sale at $672,000, which is just over $8,000 per sqm.

Apartment 5204, level 52, views over Admiralty Quays, 78 sqm and 1 carpark. Listed for sale at $688,000, which is just over $8,800 a sqm.

Compare existing, older stock of 2 and 3 bedroom apartments nearby:

From what I can tell, the current actual sales price for direct riverfront apartments in the city is between $6000 and $7000 a sqm.

Overall, Soleil is in a great location, the floor plans seem to be well designed, and Meriton will deliver. Care should be taken when selecting, as some apartments will not have great views due to neighbouring buildings -- but some apartments should have great views (if you like heights!). The apartments are a little small for my liking, and I am not sure about lack of balconey.

Wednesday, October 22, 2008

M on Mary - bank takes over?

I heard that the developer of M on Mary has gone into bankruptcy or receivership. There are a number of apartments that remain to be sold. Unfortunately, I have no other details at this time.

Tuesday, October 21, 2008

Meriton Soleil Pricing

Apartments for Sale

Priced from
1 Bedroom

2 Bedroom
1 Car space

2 Bedroom + Study
1 Car space

3 Bedroom
1 Car space

Prices as at 21 October 2008.

Monday, October 20, 2008

Ray White Sunday Auction Results

Meriton Soleil to be Released Soon

"Thank you for your email enquiry regarding our brand new 1, 2 and 3 bedroom apartments soon to be on sale. Selling off the plan the development is expected to be completed 2011/2012. We will be selling this development at the end of October or early November at our Display Centre at 488 Queen Street, Brisbane."

United States House Prices Far from Bottom

"One reliable proxy of housing values — the ratio of home prices to rents — indicates that in many cities prices are still too high relative to historical norms. In Miami, for instance, home prices are about 22 times annual rents, according to analysis by Moody’s The average figure for the last 20 years is just 15 times annual rents. The difference between those two numbers suggests that a home valued at $500,000 today might be worth only $341,000 based on the long-term relationship between prices and rents."

NY Times

No More NorthBank

The Premier axed the NorthBank development on the edge of the Brisbane CBD.

See Sunday Mail - it was front page news.

People in Casino Towers and the west side of Quay West are happy no doubt.

Wednesday, October 15, 2008

Doubtful Vision

Riverpoint Update

Riverpoint reports that it has reconfigured some of their apartment layouts:

"... we are about to release a whole new range of designs, in response to public demand. They incorporate a range of 2 bedroom, 2 bathroom apartments, 3 bedrooms apartments and Sub Penthouses. These stunning new designs will be released to the Brisbane Property Market on Saturday the 25th of October."

"The new Super Penthouse will be built over floors 7 and 8 of Mosaic [note: this is not a direct riverfront building] and will raise the level of riverfront living to unexpected heights, in this rapidly evolving prestige location. The Super Penthouse will be spread over 700m² of exceptional living. It will also incorporate a 70m² ballroom/entertaining space on the 7th floor, complete with its own private lift to level 8 – The Owners Enclave."

West End Unit Owners are Concerned

"WEST END: Riverside apartment dwellers are banding together in a bid to give their direction on the future shape of the community. More than 30 residents from the Flow, Koko, Leftbank and Tempo complexes have met to discuss the need to build a sense of community in the area. Regatta Apartments body corporate chairman Paul Rees said they hoped to build a liveable community, not only for apartment dwellers but the whole of West End.

“We’re planning a series of regular events to build community in our area and the first event will be a breakfast in Riverside Park on Sunday, December 7 at 9am,” Mr Rees said.

He said they invited local, state and federal representatives as well as community groups and property developers to attend the breakfast to hear their ideas. Among residents’ concerns are building heights, closing Riverside Drive to public traffic and fast-tracking plans for a CityCat terminal. And Mr Rees said residents felt they were not consulted about increasing building heights.

“We are appalled at the suggestions of 15, 20 and 30-storey highrises being built here,” he said.

“We moved into this area believing the height limit would be seven storeys and we don’t want to see our area turned into a concrete jungle,” Mr Rees said.

He said a CityCat terminal and a reliable bus service on Montague Rd were important to give residents adequate public transport. Mr Rees said they supported redevelopment of the old riverside industrial areas as long as it was on a “human scale” and integrated with the established community of West End, “rather than creating a concrete barrier between West End and the river”."

See City South News

River City and Oaks - Again!

I saw this on a bulletin board:

"Remember the controversy of kicking all those tenants out of Charlotte Towers??? Well... guess what... its happening again, but with River City.

The Oaks has send letters to all of their tenants telling them that they must leave because their apartments will be turned into short term accom... BUT... and thats a big but because the Oaks as NOT INFORMED any of the owners that they are kicking out tenants so that they can convince owners that they could get more money from short term accommodation."

See this post.

I would be careful and do a complete due diligence before buying in an apartment in a building managed by Oaks.

Saturday, October 11, 2008

Predictions and Guesses

A lot of people seem to think that it is the end of the world as far as property investment is concerned. These are my thoughts.


  • Interest rates are going down
  • There is low unemployment in Queensland
  • There are few vacant rental properties, and rents are still increasing in Brisbane
  • According to REIQ and RP Data, medium prices have fallen less than 3% in the past 6 months, and over the past year prices have still increased
  • Property is still selling. For example, a three bedroom apartment is Admiralty One sold in less than a week. At auctions in Mooloolaba this weekend, which has been a tough market, there were 2 two bedroom apartments that had bids of more than $1 million: Oceans 503 had a highest bid of $1,200,000; and Sirocco 604 had a highest bid of $1M.
  • Banks are still lending money, but they have tighter lending requirements
  • For most of Brisbane, there are very few delinquencies.
  • In outlying areas (such as Forest Lakes and Springfield) and low quality bulk highrise marketed to investors (e.g., Charlotte Towers, and other recent Devine buildings), there are distressed sellers who are selling for less than they paid.


  • Matusik, who is a very bullish property consultant, has the following assumptions in most of his presentations, but I am not sure how many of them will turn out to be correct (and some from his September 2008 presentation are already wrong):
    • interest rates to drop by 0.5% in fiscal 2009
    • $A remains high – above 85 US cents
    • migration to oz remains high US economy has a mild recession, mild recovery in 2009
    • demand for our resources continues
    • share market settles down unemployment remains below 5% and wages growth remains constrained
Opinion and Predictions (Guesses?)
  • Property in inner Brisbane will take longer to sell than over the past 3 years (e.g., time on market will return to a more normal period of time, from 15 days to 30 or 40 days).
  • Prices for poor quality apartments will fall by 25%
  • Prices for apartments that have their views destroyed (e.g., Charlotte Towers, 212 Margaret, River City, and some in South Brisbane) will fall by 25%
  • Prices for apartments without carparks will fall
  • Some new apartments for off-the-plan developments) are priced too high for what they are, and will have difficulties selling in the short term (e.g. Waters Edge, Empire Square, Vision)
  • Anything priced over $6,000 per sqm will struggle to sell, unless it is really special
  • Off the plan developments will not sell well until completion -- in uncertain times, people do not want to make bets on the future, especially where the product being sold is intangible -- people want to touch and feel in uncertain times.
  • Really good stuff will sell, and will not reduce in price by more than 5% (if at all)
  • In February 2009, the market will pick up, but will not have growth of more than 10% per year for at least two years
  • Due to lack of building today, things will get better for investors in good locations in the short term
  • This year, my property portfolio looks better than may stock portfolio.

Future Brisbane Apartment Developments

Useful Websites About Brisbane Apartments

When I am looking for information about Brisbane apartments under construction, I find useful information on the following two websites:


I have never been excited about Chermside. However, here are some links to Chermside apartment buildings:

Friday, October 10, 2008

Soleil Tower Website

Fall of an Empire

The Empire Square project on Elizabeth Street in Brisbane, which was to include a Westin Hotel, has been scrapped.

"Developer Metacorp is today in the process of advising investors it will not proceed with the development because it has lost financial backing, sources have told The empty retail stores on the site of the planned development have been readvertised for lease."

It was reported that a large number of the 100 apartments had sold off the plan. The minimum price was $1.3M for a 2 bed apartment.

See Brisbane Times.

Wednesday, October 8, 2008

August Property Value Index

RP Data Rismark Index for August

"The national end of month property indices report released by RP Data & Rismark International confirms that the supply and demand imbalance currently being experienced in the Australian property market has placed a floor under housing prices, resulting in minimal value falls.

Based on the analysis in the report, this is most evident in the metropolitan areas around the country where record population growth has not been accompanied by new dwellings to satisfy the housing demand.

According to RP Data National Research Director Tim Lawless the property market has proven to be remarkably resilient with national dwelling values remaining positive over the 12 months ending August 2008. Over the three months to August 2008 there was a modest decline with property values down by just 0.96 per cent over this period.

Mr Lawless said the recent figures should put to rest claims that Australia’s property market is headed for a crash. “In fact, values are holding relatively firm particularly when compared to the benchmark equities S&P/ASX 200 Index which dropped by 19 per cent between January and August,” he said.

One of the most interesting findings in the indices release today was the convergence of the capital city market dynamics over the past six months which revealed that all capital cities recorded slightly negative growth; no particular city was significantly out of step with the others.

According to Rismark International’s Dr Mathew Hardman “Clearly, the observable phenomenon of the two-tiered markets in Sydney and then in Melbourne and to a lesser extent in Brisbane and Perth has disappeared ”

“Market movements are now similar across all metro areas rather than value falls being isolated within the mortgage belts. This balancing can be attributed to the squeeze the more affluent markets are experiencing due to the turbulence in the financial and equities sector.

“Looking towards the next six months, strong excess demand in most capital cities is creating a floor under property values, making large falls unlikely,” Dr Hardman said. According to RP Data, with population growth projected to remain high and interest rates falling, the demand/supply imbalance is expected to protect the market from any major falls in property values. Rismark International’s Dr Hardman believes that unemployment is not a major factor driving property prices; affordability, excess demand and market momentum are far more significant he said.

“Although unemployment is rising, unless it grows rapidly to significantly greater levels, eg 6 or 7 per cent over the next couple of years, excess demand will eventually outweigh affordability constraints and begin to push property markets upwards again, probably by the second half of 2009.”


  • Brisbane has actually fallen more than Sydney & Melbourne over autumn & winter: on average by 3 – 5 per cent. The median house value is now $455,146 and the median unit value is now $326,606.
    South East Queensland continues to be the strongest population growth region in Australia. Such strong demand for dwellings will continue to place upwards pressure on values over the medium to long term.


Water's Edge at West End - Traffic Concerns

Brisbane apartment project dismisses transport concerns

The company behind a new apartment complex in Brisbane's West End says it does not think the project will worsen local traffic flow. The old box cardboard factory near the Brisbane River will be replaced by 220 apartments. There will be two eight-storey towers built on the site.

Ross Higgins from Pradella Developments says it should attract more transport infrastructure to the area.

"West End's undergoing a major infrastructure redevelopment from a traffic point of view now," he said.

"And really what we're doing is replacing a lot of people that were working in the area anyway.

"I don't believe it'll have a negative effect on transport in fact I think that it'll bring more transport infrastructure to the area."

Source: ABC News

In fact, there are plans for more than two buildings on the site -- with two or three buildings planned for the other side of Duncan Street as well, as shown on the map on the project website.

See also Brisbane Times

Wednesday, October 1, 2008

Brisbane Association for Rates Equity

There is now an association of apartment owners that is fighting the Brisbane rate increases for apartments. It is called Brisbane Association for Rates Equity, or BARE.


Buranda High Rise Development

See Brisbane Times

"Thousands of new residents, workers and shoppers could soon flood the inner-city suburb of Buranda if a large-scale urban village, featuring buildings up to 32 storeys high, is approved by Brisbane City Council. The Anthony John Group (AJG) this week lodged an application to transform a parcel of former industrial land on Logan Road, south of the city, into a mega-development. Dubbed Buranda Village, the site would be home to eight buildings comprising residential apartments, office space, a hotel, a cinema complex and sprawling retail outlets."

I was not impressed by Anthony Johns Group's apartment development in the Valley, the Emporium -- built between two main roads, the apartments either look at a car park or a main road. Small apartments and noisy. My guess is that this will be much of the same