Parklands at Sherwood Residential Development

I recently visited the Parklands at Sherwood development, by Pradella. It is currently under construction, with stage one completion planned for this year.

When complete, the development will have 239 residential dwellings - a mixture of houses, townhouses and apartments. They all share a pool, gym and resident's meeting room. For this post, I will focus on the apartments.

Stage One consists of 28 apartments, over two floors. There is a mixture of 1, 2 and 3 bedroom apartments. Half the apartments face the park, and half face the town houses.

Stage Two consists of 54 apartments, over three floors. Again, a mixture of 1, 2 and 3 bedroom apartments. Half the apartments face the park, and half face the "village green".

All apartments have air conditioning, and elevator access to 2 car park spaces in the basement.

The sizes of the apartments are typical. For example:

• larger: 2 bedrooms, 2 bathrooms, 1 study nook = 91 internal and 30 external = 121 sqm
  
• medium: 2 bedrooms, 2 bathrooms, 1 study room = 88 internal and 22 external = 110 sqm
• smaller: 2 bedrooms, 2 bathrooms = 83 internal and 14 external = 97 sqm
  

The larger apartment listed above is an end apartment, and so has good light from two sides. The living area has over 5 metres of glass sliding doors. The ensuite has both a bath and shower. There is a separate laundry. The bedrooms are well separated, and the second bedroom is near the bathroom.

For the medium apartment listed above, both bedrooms have views. The bedrooms are well separated, and the second bedroom is near the bathroom. The ensuite has both a bath and a shower. The separate study room is a real room (but with no windows) -- it is large enough to be a nursery, guest bedroom or media room.

The best thing about the development are the views from the parkside apartments. You just see green parklands for miles. The apartments are built on a hill, facing north and north east. They are up high, so even the lower floor has views. There is park immediately in front, then Oxley Creek, the Brisbane River and Indooroopilly Golf course. From the second floor apartments you can see city buildings -- I could see the clock on the Suncorp building. Great aspect, views and breezes. I really had low expectations, but was blown away by the views. And they can never be built out.

This development will be unique in the Sherwood / Graceville / Chemler area. It is well located, near the Sherwood State School, and walking distance to Woolworths in the Sherwood village, and the railway station at Sherwood. Here is a link to an area map.

In stages one and two, most of the 2 bedroom parkview apartments have sold. There are no one bedrooms that have park views. All of the 3 bedrooms have parkviews, and most of these have not sold. Price ranges are below, and when compared to FKP's development at Albion, these prices look like bargains for what you are getting:

1 bedoom apartment	2 bedroom apartment	3 bedroom apartment
$399,000 - $439,000AUD	$560,000 - $609,000AUD	$735,000 - $789,000AUD

SouthPoint Residences at SouthBank

Here is an interesting drawing, showing the proposed building at Southbank, with the existing Collins Place building left standing.

Landmark Byte Brisbane Residential Report

"After recording the strongest growth and activity for the last five years during 2007, the Brisbane residential market like other markets across the country has entered a period of softening. Although key fundamentals of the market including limited housing stock and land supply, record low unemployment and continued growth in population remain solid, other factors such as affordability, high interest rates, declining consumer sentiment and volatility in equities and credit markets have produced a greater impact on the overall market."

"LandMark White expects the Brisbane residential market could fall by up to a further 5% in the next six to twelve months. We anticipate the landing will be quite soft across most market sectors due to the strong fundamentals in the Brisbane market including population growth, under supply of housing and a strong rental market however there is a risk the market may get worse rather than better. This appears to be very much dependent upon overseas issues and a slowing global economy. In the medium term, the only prospect of a change in the market is for the Reserve Bank to soften interest rates further. This now seems more possible however there is a perception that as interest rates fall further, the price growth seen over 2007 will return. This optimism may prove to be unfounded with buyers more likely being more aware of the negative implications of such a price growth cycle and issues of affordability."

See full report.

Vision or not?

See this AFR story, which says that Vision does not have finance and no construction contract has been signed. Trilogy sounds more optimistic. It reports that 74 out of 192 hotel apartments have been sold. The Westin Empire Square -- hard to tell what is actually happening -- sales are good, but no finance yet.

Trilogy and Water's Edge Video

See this video.

A similar story from the Brisbane Times, which is a little misleading because presales have been going on for months:

Brisbane skyscraper nets $50 million in first week
Shannon Molloy | September 19, 2008 - 10:23AM

Investors have swooped on a new mixed-use CBD skyscraper development and snapped up more than 70 hotel suites in less than a week, resulting in a $50 million sales success.

Standing at 265m and boasting residential, hotel and office space, the Trilogy Tower project on Queen Street will be one the city's tallest buildings when complete.

Developer APH Capital caused a stir last weekend when it officially opened sales for its luxury hotel suites, which represent the first new five-star product to be released to the local market in more than a decade.

More than 30 per cent of the hotel component has sold since last weekend, generating at least $50 million.

Brisbane has one of the highest hotel occupancy rates in the world and the hotel market has been bustling with investor activity in recent years.

APH managing director John Wilson said the success at Trilogy highlighted the continuing strength in the market.

"It shows there's a huge awareness of the demand for new hotel room stock and a particular need for five-star rooms in the Brisbane CBD," Mr Wilson said.

"The response to the product has been nothing less than sensational."

Trilogy Hotel, to be managed by Mirvac Hotels and Resorts, will comprise 192 fully-furnished one- and two-bedroom apartment suites.

The rest of the tower will also be home to a luxury residents and an office component featuring 31,000 square metres of space over 28 levels.

Construction is expected to be complete in 2012.

Brisbane Apartment Prices are Not Decreasing

According to the REIQ Unit Report issued today, demonstrates that Brisbane apartment prices are not decreasing.

For Brisbane City downtown area, the median sales price for apartments the 12 months to the end of June 2008 was $451,000, which is an increase of 4.2% over a year. The median sales price for the 3 months to the end of June was $460,000, also an increase over the quarter.

Related story in Courier Mail

Sales and Auction Results for Brisbane Apartments

Felix

• Apt 294 - highest bidder = $395,000

Skyline

• Apt 254 - passed in
• Apt 422 - passed in
  

Riverplace

• Apt 32 - highest bid - $640,000
• Apt 304 - passed in

Aurora

• Apt 583 - highest bid $900,000
• Apt 584 - highest bid $900,000

Casino Towers

• Apt 3104 - sold for $316,000

River City

• Apt 2105 - sold for $375,000

Recent Opinions

Extracts from RP Data's Property Pulse this week:
"With fewer buyers in the market, ABS statistics are highlighting a reluctance by developers to initiate the building of new housing projects. This may be good news for sellers, as the lack of new stock helps to underpin existing market listings with a floor price. Investors should also benefit as population growth and a general housing shortage will likely drive up rents in coming years.

The new figures suggest residential developers are still cautious of soft market conditions despite a fundamental undersupply of residential housing stock. The reluctance from developers to build is understandable: buyers are few and far between at the moment and the number of housing loans continues to fall as credit standards tighten. Adding to the disincentive to build are the ongoing rises in the cost of construction materials and shortage of labour.

The net results of these two factors: low levels of housing construction and strong population growth, are at odds with each other. At the base level we are seeing demand for housing far outstripping supply, and the situation is worsening.

There are two factors flowing from this supply/demand imbalance. Firstly, the undersupply of dwellings places a natural floor under housing prices. This is the fundamental reason why property values have not fallen further in Australia’s major residential markets.

Secondly, the pressure is building on the rental market. Vacancy rates are averaging less than 2% across the nation’s capital cities and rental rates for houses have increased by almost 11% over the last year. We should expect to see rises of a similar magnitude over the coming year.

As property value growth remains sluggish and rental rates continue to power ahead we can expect rental yields to show consistent improvements. For investors the prospects are quite compelling: strong buying conditions and the prospect of improving returns. For renters the news isn't so good – expect further rent rises and more competition for quality rental stock. Now may be the time to consider extended lease arrangements to lock in at today’s prices!"

Landmark White says, in a recent email newsletter:
"LandMark White expects the Brisbane residential market could fall by up to a further 5% in the next six to twelve months. We anticipate the landing will be quite soft across most market sectors due to the strong fundamentals in the Brisbane market including population growth, under supply of housing and a strong rental market however there is a risk the market may get worse rather than better. This appears to be very much dependant upon overseas issues and a slowing global economy. In the medium term, the only prospect of a change in the market is for the Reserve Bank to soften interest rates further. This now seems more possible however there is a perception that as interest rates fall further, the price growth seen over 2007 will return. This optimism may prove to be unfounded with buyers more likely being more aware of the negative implications of such a price growth cycle and issues of affordability."

Milton Union Station Development

"A 30-storey highrise with 210 units, hotel, and a 10 storey office tower over Milton railway station will be built within the next three years after receiving the greenlight from Brisbane City Council."
See Courier Mail
I wonder if the fumes and smoke output from the brewery will impact those living in the apartments?

The article also mentions the Mill at Albion:
"FKP is also building another transit oriented development at Albion, which was approved by the council in April. Mr Miller said so far 120 of the 140 units averaging about $650,000 each had been sold."

Promenade Building at Multiplex's Portside

Multiplex have started to sell the fourth building in the Portside development at Hamilton Shipping Terminal. This building is named Promenade. Here is a video.

Promenade is being marketed as waterfront, but the building is not waterfront. It is behind other buildings. (In addition, the firth building, Hamilton Waterfront Residences which is the same height, will be built in front of Promenade. HWR will have "absolute waterfront" apartments with an average price of $1.6M.)

Promenade has apartments from level 4 to level 15. There are a mix of 1, 2 and 3 bed apartments. There are two levels of quality -- the lower levels are not as good quality as the higher levels. For example, the lower levels are not fully airconditoned - there is a wall mounted unit in the living room only. The cupboards are laminate. On the lower levels, the quality of finishes are lower, and in my opinion by today's standards, quite poor.

There are 144 apartments, and according to documents dated 19 September 2008, 45 apartments have sold. Most of the apartments that sold are on levels 6 and 7 (which are the 3rd and 4th levels of apartments). Only 8 apartments have been sold on the top six levels. The most expensive is $1,650,000. The cheapest is a 1 bed with no car for $385,000.

Here are some sample prices (noting that the first level of apartments is level 4):

Level 5, Apartment P014, 2 bed, 2 bath, 1 car, 90 sqm internal, 24 sqm balcony, 114 sqm total, plaza views = $669,000

Level 8, Apartment P033, 2 bed, 2 bath, 1 car, 95 sqm internal, 29 sqm balcony, 124 sqm total, river views = $719,000

Level 12, Apartment P141 (illustrated above), 2 bed, 2 bath, 1 car, 92 sqm internal, 18 sqm balcony, 110 sqm total, river views = $960,000

Level 12, Apartment P142, 2 bed, 2 bath, 1 car, 93 sqm internal, 17 sqm balcony, 110 sqm total, Hamilton views = $790,000

Level 14, Apartment P068, 2 bed plus study, 2 bath, 1 car, 103 sqm internal, 26 sqm balcony, 129 sqm total, north view = $990,000

The rentals estimates given out at the display say that the rentals estimated for Promenades for two bedroom apartments is $520 to $600 per week, or up to $675 per week if there is a study. This is not a great return for the prices listed above.

Some other figures in the Multiplex brochure:

Capital growth for units in Hamilton in 07/08 was negative 5.9% (for Brisbane City it was 13.5%).
Medium sales price for units in Hamilton in August 07 was $645,000, in March 08 it had dropped to $438,000. In the corresponding period, Brisbane City medium sales price for units had risen by $30,000.

What concerns me about this building is that it is not absolute waterfront, more than half the apartments do not have river views, the quality of finishes on the lower floors are poor (thus attracting cheaper rents and pulling down building values), and the building will eventually be surrounded by other buildings on all sides. Those apartments with river views have obstruction and roof views of other buildings. The price per sqm is high, for example $8727 for a 2 bed on a higher floor. As far as I can tell, this building does not have a pool or gym.

Luxury Apartment Report

From Property Wire
The Luxury Apartment Report released today by Colliers International reveals multimillion-dollar, quality designed units are helping Brisbane’s property market defy a national slowdown in sales. "High end luxury units are outperforming the general market in capital growth," said report author, Colliers International research analyst Alison Timchur.

Queensland's developers and agents report healthy sales to local buyers. "One thing most buyers have in common is that generally they are Brisbane locals, with the occasional Gold Coast buyer," said Ms Timchur.

See also Brisbane Times

West Village

Aria has launched a website for its South Brisbane - West End project, currently in the final stages of council approval.

www.gowestend.com.au

This project will have mostly small one bedroom apartments, priced from $380,000. There will be some two bedroom apartments, priced from $660,000.

The building will be located on Edmondstone Street in South Brisbane.

Soleil - Meriton's New Adelaide Street Highrise

Soleil is taking expressions of interest and they have started advertising.

"At Meriton we never compromise on quality with any of our apartments. You will always get the very best of everything at an affordable price. Meriton the country's only major developer that is 100% Australian owned and managed will be building a 74-level tower situated on Adelaide St within Brisbane's CBD called Soleil.

Soleil will be the most impressive building in Brisbane, with superb, affordable luxury apartments starting from the 31st floor, maximizing the outstanding views at every turn. This development will also include 30 commercial offices, 3 retail shops and 175 serviced apartments.

As with many Meriton developments, Soleil will have access to resort style facilities: an indoor heated lap pool, gymnasium, spa, sauna and theatrette."

As you can see from the image below, it blocks out Skyline completely.

Northshore

The Courier Mail reports (14 September 2008):

"A NEW riverside neighbourhood, 6km from the Brisbane CBD, will house 13,000 residents, feature high-rise buildings, a boat harbour and golf course.

Premier Anna Bligh will today release master plans for the Northshore Hamilton development as part of her Toward Q2, Tomorrow's Queensland vision. Ms Bligh said it would offer "lifestyle options from the affordable to the luxurious". Work will begin at the 304ha site – between Brett's Wharf and the Gateway Bridge – next year.

"This is a vision of how this area can be revived for Queenslanders over the next 20 years and is an example of the sort of development we want to see under my Government's Toward Q2 ambitions," Ms Bligh told The Sunday Mail yesterday. This master plan is a vision of a strong, fair, green, healthy and smart development. It combines potential facilities for super-yachts, with affordable housing, healthy open spaces and green initiatives." ...

"Northshore Hamilton will play an important role in providing housing, in close proximity to the major growth centres, for the company director to the factory floor worker," Ms Bligh said. "Over 7000 new dwellings will accommodate 13,000 new residents."

The Premier said the riverfront would feature luxury homes with moorings for pleasure craft, with at least 15 per cent of other properties classified as "affordable housing".

Buildings would rise from three to 15 storeys, with two "landmark" apartment/office blocks of 20 to 23 levels.

The master plan for Northshore and Bowen Hills can be viewed on the Urban Land Development Authority website at www.ulda.qld.gov.au

Brisbane Students Forced Out of Housing

See recent article in Brisbane Times.

As an aside, a new apartment complex is to open in Indooroopilly in October. Called Riverbend Towers, it has 35 apartments, all of which will be rentals. The majority are three bedroom apartments, with 11 two bed apartments. The apartments are relatively large. Rents range from $500 to $550 per week for a 2 bedroom apartment; $650 to $750 for a three bedroom apartment; and $950 for a penthouse.

El Dorado Village at Indooroopilly

The El Dorado Village project at Indooroopilly has launched its website.

See www.eldoradovillage.com.au The project is to launch in October, and pre-sales have been strong. There are 100 apartments in the complex, mostly 2 bedroom apartments, with some 1 beds and 3 beds. There is a display suite at Park Road in Milton.

The project does not appear to have development approval yet.

Buzz Coming Back to Brisbane?

Have a look at this comment:
http://www.realestatedaily.com.au/2008/08/26/the-buzz-is-coming-back-to-the-brisbane-real-estate-market/

Hotel Apartments

Hotel Developer Lands in Red Ink, Despite Boldface Names
... “He got caught in a bad concept — which is the hotel-condo concept,” he says. “That’s a failed concept. With a failed concept, he was swept along. That was a bitter lesson, and he is trying to learn how to deal with all that financial distress.” ...
"... During the real estate boom, condo-hotels were seen as a way for stars, jet-setters and other well-heeled investors to buy apartments that they could rent to others part time. ..."
"... That didn’t solve all his problems. Local real estate agents say Mr. Falor had trouble selling the Nicky O. units because he mispriced them. Peter Zalewski, a Miami Beach broker, said that Mr. Falor had a location with “prime” views, but was asking buyers to pay roughly $2,000 a square foot for a condo-hotel unit they could use only part time, when traditional condos nearby cost about $1,000 a foot. After buyers factored in maintenance, taxes and other fees, it would have been unlikely that rental revenue would have covered the monthly cost of their investment. ..."
See New York Times

Pricing Pressure on Developers

See Residential Developer Magazine regarding how developers are trying to get you to buy without having to cut prices.

Note the reference to a Brisbane developer reducing pricing by more than $1M on an apartment project.