Friday, June 26, 2009


Terry Ryder, a real estate commentator, had an interesting article in The Australian on Thursday about investing in Noosa.

"The apartment market has done even worse, delivering growth averaging less than 2 per cent a year. The median unit price for the Noosa region today is lower than four years ago. This kind of subnormal performance is common among popular seachange locations -- contrary to the widely held belief that the Gold Coast and Byron Bay are great places to invest in real estate. They may be lovely places to live but that's a different matter. Investors want an affordable entry price, good income returns and high capital growth -- and they're unlikely to find any of the above in these markets."

Saturday, June 20, 2009

Brisbane Apartment Recent Auction Results

  • Felix, Apt 317, Level 31, 3 bedrooms, 3 bathrooms, over 150 sqm - highest bid $820,000, now listed at $950,000
  • Willahra Tower, Apt 49, 2 bed, 2 bath, 96sqm, no bid at auction, now listed at $449,000
  • Quay West, Apt 401, Level 4, 2 bed, 2 bath, 126 sqm, vendor bid of $600,000
  • Roma Street Parklands, Building 3, Apt 3095, 3 bed, 2 bath, end/rear unit, vendor bid $535,000, listed at $600,000 and reported as sold
  • Roma Street Parklands, Building 4, Apt 4046, 3 bed, 2 bath, lower floor with no view, vendor bid $550,000, now listed at $700,000
  • SoHo South Brisbane, Apt 605, 3 bed, 2 bath, impacted by new bridge being built, highest bid $550,000, now listed at $600,000
  • Toowong, 24/12 Patrick Lane, 2 bed, 2 bath, sold for $487,000
  • New Farm, 7/38 Elystan Road, 2 bed, 1 bath, sold for $780,000

Thursday, June 18, 2009

South Point at South Bank - New Website

South Point has a new website.

"Take a moment to appreciate the journey that a stroll through a palatial Southpoint residence offers. Once inside, the walls ascend forever and the warm, opulent timber floor implores you to remove your shoes. There are vast living areas, lavish dining rooms and king-sized bedrooms. Lean on the private bar, recline near the classic fireplace, and discover the divine natural stone top kitchen that forms a living space all of its own. There's even the rare luxury of a powder room. This is just a sample of what gives Southpoint Residences their unique difference - there is so much more to be experienced."

Map and Transport

RP Data Auction Results

RP Data Auction Results
These results appear to be more accurate than other auction result sources.

Units Gain Market Share

"Instead, many prefer the cheaper priced units and apartments, which also often are closer to the CBD. The affordability is especially a growing factor this year, as that section of the market has become the dominant force in the property market. ...
With the growing market share, units have also shown a stronger capital growth than houses in nearly every capital of the country. In Sydney, Brisbane and Canberra, units showed positive 12 month growth in median value up to February this year, compared to negative growth for house median values. ...
Another key is to make sure there is a parking spot included, something that can make a huge difference in demand, especially if the unit is in an area with few street parking opportunities. “No matter where you buy an apartment, never ever buy it without allocated parking,” says Wakelin.

What not to buy

There are, however, areas where demand is not so strong. For one, stay away from high-rise apartments, particularly in areas of overdevelopment such as the Gold Coast, the Sydney CBD or the Docklands in Melbourne, say experts.

“We find for investment purposes, high-rise apartments do not work,” says Wakelin. “They are very generic, so there’s little scarcity value with them.” Ryder agrees, saying investors should not be swayed by the magnificent views from atop beachfront high-rises in the Gold Coast. Investors should remember they won’t be living in these properties, and in the long run, they don’t show as much capital growth.

“There’s a lot of glamour in buying a high rise, but history shows it’s generally a poor investment,” says Ryder. “Put aside the emotions, and just look at the sums. You’re better off not buying something with an ocean view like in Surfer’s Paradise.”

He also says buying a used apartment is better than buying a brand new one.

“There’s a huge price differential with a new product and equivalent second-hand product,” says Ryder. “That’s simply because the cost of development is so high. The research shows there’s commonly a price difference between 30-40% between new and old apartments.”

That ultimately means for an investor that it’s harder to get capital growth out of a newer product. It might look nicer, but it will cost you in the long run. There’s also little scarcity in some areas for new product, such as the Gold Coast, where new apartments have been built without abandon. And once its no longer new, you actually lose that tag and that value.

“There’s a lot of risk in committing to buy something now and paying two years later, whereas the market can go in the wrong direction in that time,” says Ryder. “Plus developers tend to build that (expected value growth) into today’s prices these days.”


Time to Invest?

"One thing is for sure, the worst of the credit crunch is behind us now and this environment is very favourable to property investment. This will provide the ballast that keeps housing markets stable through these turbulent waters."

Wednesday, June 17, 2009

Some Owners Unable to Pay Strata Levies

"A call by debt collection agencies for reforms to the cost-recovery process for bodies corporate comes as apartment owners at a Brisbane building are locked in a legal fight with a resident, who had racked up a debt of more than $50,000 since 2004."

"In the Brisbane case, one of the owners in the 51-unit 1970s building on Leichhardt Street said that since 2004, the problem owner had not paid his strata fees or levies on time.

In two previous actions against him, one of the building's apartment owners, who did not want to be named for fear of retribution, said the problem owner ended up paying, with $20,000 of the $50,000 owed comprising legal fees.

"We have had two actions against him previously where he has paid on the steps of the court," they said.

"Because he is an ongoing serial pest, we should have some entitlement to say you are no longer entitled to be here."

The Australian

Gold Coast Bad - Midwood

On the Gold Coast, there were 79 new unit sales in the three months to May 2009, compared with just 49 the previous quarter. But it is a long way from the boom times of 2007 when 369 new units sold in the August quarter. The latest Midwood Queensland Investment Report says at current take-up rates there is more than four years' supply of new unit stock. In the past three months, nearly half of the new unit sales were in Meriton's Brighton on Broadwater project.

Midwood report author Bill Morris said most of these deals were in the sub $500,000 range, where the market was fairly steady.

Median price data from the Real Estate Institute of Queensland released yesterday reveals no change in the median price for units in the Gold Coast local government area.

The median of $345,000 for the March quarter is 3.4 per cent down on the previous year.

Real Estate Institute of Queensland chief executive officer Peter McGrath said price discounting had helped bring buyers back into the market at the upper end. "We've seen some receiver sales where people who bought a unit off the plan for $2.5 million, being sold for $1.6-$1.7 million," Mr McGrath said.

"Units that had previously been selling for $900,000 were getting $750,000."

In Brisbane, the unit market also is showing signs of improvement despite the median price for the Brisbane statistical division dropping 1.4 per cent over the quarter to $345,000. Over the year, the median has increased by 2.6 per cent.

There were 28 unconditional new apartment sales in Brisbane during the May 2009 quarter, the highest number since February last year. For the past 18 months, new unit sales have averaged 13 every three months.

The median price for all unit deals in Brisbane city has fallen 4.3 per cent to $440,000 in the three months to March 2009. Over the previous 12 months the median increased 1 per cent to $450,000.

The Australian and GC

Saturday, June 13, 2009

Housing Prices Hold Up

"Of course it's not good news at the top of the market, but despite all the attention given to Mosman, Toorak, Peppermint Grove and Noosa, that's only a small fraction of total Australian housing and doesn't matter very much in the overall economic scheme of things."

The Age

Maintenance Fees

Interesting comment from another blog:

"I must admit I had no idea what I was doing when I bought my first apartment; Low fees meant I liked the building, without knowing anything financially about the building, I have since researched the other buildings I was also interested in, and to be honest I was just plain LUCKY I bought in the building I did, only after joining the committee did I realize we actually have a huge surplus as well as low fees ( that have actually gone down further since I bought)
I also think it's a huge mistakes for people who purchase an apartment or unit with a strata title, but fail to join the committee or even attend the AGM, Its probably their biggest investment they will ever make, but they don't care how, or who is running it."

Domain Blog

Union at Milton

Union at Milton has updated its website -- FKP has cleared the site, and is waiting development approval.

Off The Plan Contracts

This week, the Queensland Fair Trading Minister Peter Lawlor announced that the Government would be legislating in response to the Court of Appeal decision of Bossichix Pty Ltd v Martinek Holdings Pty Ltd [2009] QCA 154 handed down on June 5.

The Minister said:

"The Supreme Court last Friday dismissed an appeal where, in the first instance, the buyer of a unit in a community titles scheme was held to have validly terminated the contract based on a technical breach of the Body Corporate and Community Management Act 1997. The technical breach related to section 212 of the Act and the court held that the contract did not strictly comply with the wording required to be used by the section.

The decision means that buyers can now potentially avoid a contract purely on a technical breach of the Act, even if they haven't experienced any material detriment. This puts hundreds and potentially thousands of off-the-plan contracts at risk. It is a potentially serious situation for the development sector and the wider Queensland economy.

The issue is that this legal precedent could be used, for example, where a buyer simply regrets entering into a contract, or if the buyer could have purchased a unit or property at a lower price. This was never the intention of the legislation and creates great uncertainty for sellers and developers, particularly in relation to off-the-plan sales where there is a long period of time between execution of the contract and settlement. We cannot afford this uncertainty in today's economic climate.

At the same time, the Government is not looking to in any way water down the legitimate consumer protections encompassed in the Act - rather to correct a technical failure of the contracts to fully reflect the requirements of the legislation. All of the normal protections of the legislation will be preserved.

The Government will be introducing legislation next week to address this situation and ensure that both buyer and seller are returned to the situation they believed to be the case - and agreed to - at the time of the signing of the contract."

Lawyer's comment

Wednesday, June 10, 2009

Fire at Grosvenor

There was a fire at the Grosvenor Apartment building on Edward Street, Brisbane, this evening. The fire was on the balcony of a lower apartment. It was not a major fire, but was big enough so that flames could be seen from the street, and there was lots of smoke. About 5 fire engines attended.

Monday, June 8, 2009

Comment from a Reader re Oaks and Aurora

Sunday, June 7, 2009

Mirvac Sues Many

Mirvac Queensland has recently launched a number of lawsuits in the Supreme Court of Queensland. These lawsuits appear to seek performance of off-the-plan contracts for Tennyson Reach, where the buyer did not settle. Buyers that have been sued include McGann, MG Taylor Nominees, O'Hagan, De Pasquale, Holland, Crooks, Douyere, Thompson, Ibencastle Pty Ltd, Beioley, Campbell, Horne, and others. It would appear that Mirvac believes that the apartments that swiftly sold a few years ago off the plan are now worth less than the contract price? In the third stage of Tennyson Reach, about 70 apartments remain for sale in the Farringford Building. There are at least 12 apartments in stages one and two listed for resale. When I visited recently, the development seemed like a ghost town.

Oaks Sells Out - To Brother!

Oaks has sold the management rights for 212 Margaret Street and Lexicon Apartments. The sale was to a newly created company partly owned by the brother of the CEO. I feel sorry for owners of any apartments that Oaks manages. You can read reports in previous posts about how Oaks is turning apartment buildings into short term stay buildings. I feel even more sorry for the owners that are now dealing with this new entity.
At the recent Oaks AGM, there were reports that angry Aurora owners questioned the CEO of Oaks, and that he could not provide sensible answers.
See ASX Release and follow-up.

Apartment House

Bovis Lend Lease, an Australian company, is building a wonderful apartment building in New York City - 535 West End Avenue.

Some floors are full floor apartments, and on other floors there are two apartments per floor. One of the smaller apartments is 5 bedrooms, 5 bathrooms and is 408 square metres in size.

Why don't we get this quality apartment house in Brisbane?

Saturday, June 6, 2009

Suburbs With Greatest Number of Apartments List for Sale

See this chart for apartments with greatest number listed for sale. Chart is from RP Data's Property Pulse.