Saturday, October 31, 2009
Friday, October 30, 2009
The development is behind other buildings, and the fourth building in the development will block some of the river views from Promenade. The better views are to the west, but the apartments do not have central air conditioning - -there is a split system aircon, with a compressor on the balcony, for the living room only. Not a good call Multiplex!
- level 4, 2 bed, 2 bath, river side, 92sqm internal, 112 sqm total - $695,000
- level 5, 2 bed, 2 bath, northern view, 90 sqm internal, 114 sqm total - $650,000
- level 8, 2 bed, 2 bath, river side, 91sqm internal, 120 sqm total - $819,000
- level 9, 2 bed, 2 bath, river side, 93 sqm internal, 111 sqm total - $870,000
- level 10, 2 bed, 2 bath, northern side, 93sqm internal, 112 sqm total - $850,000
- level 10, 2 bed, 2 bath, northern side, 93sqm internal, 115 sqm total - $710,000
- level 15, 1 bed, 1 bath, northern side, 55 sqm internal, 72sqm total - $515,000
- level 15, 3 bed, 2 bath, river side and river views, 118 sqm internal, 150sqm total - $1,275,000
Mosaic The Valley is now being sold off-the-plan, with a large advertising campaign. It is located on Ann Street (the major road from the airport to the city), at Church Street. If there are enough off-the-plan sales, so that construction can start, the developer hopes to complete in mid-2012.
There are 16 apartments per floor, mostly small 1 bed apartments. The building is about 15 stories high. There are over 200 apartments. The building does not have a pool. Most apartments do not have a balcony.
The apartments are small. For example, there is a studio apartment which is 50sqm. The bedroom is located internally, with sliding doors that can open. A similar sign is 54sqm. The 54sqm studio apartment, with a car park, on a mid-level is about $500,000 (or $435,000 without a car).
The largest style apartment is a 2 bed, 2 bath, for example, 79sqm, plus a 7 sqm balcony. The two bedroom apartments are located at each of the four corners of the floorplate -- so two are on Ann Street, and the other two face West. Not ideal in either case.
The two bedroom apartments range from $505,000 to $700,000.
The developer is Leighton Properties.
Sunday, October 25, 2009
"The contract provided that the seller could make changes to the size of a lot of up to five per cent (more or less) than that shown in the Disclosure Statement. Accordingly, the description of the floor area on the plan insofar as it operated to clearly identify the lot should be taken to be up to five per cent different (more or less) from 177 m2, namely that it would have an area of between 168.15 m2 and 185.85 m2. On this basis the reduction in the size of the balcony by 1 m2 as depicted on later plans including plans that became part of the second further statement did not mean that the Disclosure Statement contained information concerning the floor area of the proposed lot that became inaccurate.
In short, insofar as the description of the floor area served to clearly identify the lot, the floor area was to be between 168.15 m2 and 185.85 m2 and this information did not become inaccurate after the Disclosure Statement was given. On this basis, the reduction in the size of the balcony by 1 m2 did not give rise to an inaccuracy that the plaintiff was required to address in a rectification statement under s 22."
The leason to learn here is that most off-the-plan contracts have a clause that says that apartment sizes can vary. In this case, the purchaser could have ended up with 10sqm less than what they believed they were getting, and would still be required to settle.
Friday, October 16, 2009
|Locality||Weighted average median¹||Median Rent /Wk||Annualised Median Rent²||Gross Rental Yield|
|Brisbane City/Spring Hill||$360,676||$540||$28,080||7.8%|
|East Bris/Kangaroo Point||$401,306||$435||$22,620||5.6%|
|Highgate Hill/Sth Bris/WEnd||$440,704||$460||$23,920||5.4%|
|Kelvin Grove/Red Hill||$493,103||$340||$17,680||3.6%|
Recently, a number of purchasers of real estate in an off-the-plan strata title office development in Brisbane, the Matisse Tower, got out of their contracts.
He is quoted in The Australian as being a director of the developer of Matisse
Brisbane's Matisse Tower office sales at $40m | The Australian
- The APM results that are the basis for the report are often incomplete, as a number of auction results have not yet been reported.
- Brisbane has far fewer auction sales than Melbourne and Sydney - so the report does not take into account sales other than by auction which is the bulk of the sales in Brisbane
- The APM results focus on Saturday auctions, and do not capture auctions during the week. Ray White, for example, often has Friday morning auctions.
- The report, for the most part, relies on agents reporting to APM. If the agent has a bad result, there is less incentive to report.
"A very frenetic listing week has culminated with the official listing of nine riverfront apartments (under instructions from Mirvac Queensland where the buyers have not settled). These apartments are to be auctioned in a line on Saturday the 14th November at 12 noon. Our clear instructions are that these quality riverfront apartments WILL BE SOLD.
Elsewhere, buyer activity in the middle and upper ends of the market continues to increase as we move into one of the busiest sales times of the year.Warm Regards,
Sunday, October 11, 2009
In my opinion, the developer did a poor job on the fitout, so some of the apartments have a bad feeling.
Saturday, October 10, 2009
A reader forwarded me an interesting email chain with an agent, about this advertisement for resale of an off-the-plan apartment in Riverpoint in West End.
Artique building, a Rapits building in Surfers Paradise, completed about 2 years ago.
- Apt 1202, 12th floor, 2 bedrooms, sold off the plan for $445,000 listed at $580,000, sold in June 2009 for $300,000.
- Apt 607, 1 bed plus study, sold off the plan for $425,000, listed at $550,000 but sold in 2009 for $295,000.
- Eight 2 bedroom apartments were sold in one line (403, 404, 504, 1004, 1104, 1203, 1205, 1304), for an average price of less than $400,000 each, this time last year.
- Apt 2604, large two bedroom with ocean views, sold off the plan for $900,000, recently listed at $1M, then $795,000 but sold for $695,000 in September 2009 at a loss of more than $225,000.
- A two bedroom on level 3 is currently listed for resale at a price less than the buyer's purchase price.
- The penthouse went to auction last year but did not sell.
Here is a great advertisement from Ray White, bragging about a sale well below listing price.
"Another Property SOLD by the Ray White Surfers Paradise Group!
HEAVILY REDUCED $550,000 Now just $419,000"
This property was sold for $380,000 at the end of September. (It is an apartment in Chevron Towers.)
Friday, October 2, 2009
For the "Carrington" Building (268 apartments, with 302 car parks).
Revenue for residential apartments - $11,400 per sqm, totalling $411M
Revenue from selling management rights - $2.45M
Total Development costs, including land value at $49M and construction costs at $177M = $310M
Profit - $85M
Interestingly, marketing & commission costs are $22M.
("Marketing Costs allowance 2.0% of Gross Sales Revenue. Commissions of 3.0% of Gross Sales Revenue with 50% paid on unconditional contracts & 10% deposit held.")
So, for a 2 bed, 2 bath apartment (110sqm in size), the average price would have been $1.2M. Of this, about $350,000 is profit, and $60,000 approx is marketing costs and commission for the sales agent.
"The Redcliffe peninsula was a stellar performer through the 2003 boom. The pointy end of Brisbane’s northern beaches appeared to be an undiscovered wealth of natural riches that went from obscurity to belle of the ball. Council was gung-ho in getting plenty of capital invested in the area and, on the whole, it has awoken this sleepy centre. The downside is the current and continuing oversupply of new units in the area, particularly in the high rise sector. Local government took on a flexible approach to development submissions where many projects were assessed on an individual basis with such items as public space contributions affecting the allowable density of a site. Much of these large scale attached unit developments also take advantage of water views and a café lifestyle that drives demand in so many other centres. The area saw a rush of investors from all around the country eager to take advantage of this now revealed gem. Unfortunately, oversupply is knocking the wind out of the areas sails (and its sales). Capital growth for new unit buyers has been a touch subdued and it looks to continue in this disappointing vein for a little while yet.
A surprise disappointment has been the multiple tenancy properties in greater Brissy. Multi room student complexes, genuine purpose-built flats buildings and boarding houses haven’t sparked as expected over the past year. The income sure looks good but its fair to say that some steam has escaped the rental market and future income potential is a touch more tarnished than it was 12 months ago. These properties probably have some good potential in the long term as long as you stick with the fundamentals - good location and a ready tenant base.
Infrastructure upgrades are another area that has lowered buyer expectations in locations that deserve a little more respect. Kedron is a good case in point. Almost overnight the Northern Busway turned sections of the suburb into a dust laden construction site – not the thing you necessarily want to wake to each day. The works have caused quite a bit of inconvenience and put off a few purchasers. The upside for those willing to take the plunge and grin and bear it is that, if finished right, these areas will benefit from improved transport access and useable community infrastructure."HTW October Report
"The sectors where we have seen biggest falls have been based generally around discretionary/lifestyle properties. Certainly the upper price level homes and units fall into these categories. Instead of people selling their principal place of residence, they are selling the holiday house and subsequently we have seen a significant softening in the values. In some cases, these values have fallen well below replacement cost.
There is an interesting change in the gap between lower priced property and upper priced properties. For example, a property that was worth approximately $350,000 in say 2005, is now worth in the vicinity of $400,000. Whereas a property that was previously worth $1,300,000 in the same period is now worth $1,000,000. This gap has shrunk significantly, which would lead us to believe that something has to give. Whether that is the lower priced properties are to fall in values, or the upper price properties are to increase in values, is anyone’s guess."
HTW October report says:
"Over the last 9 months, it would be of no surprise that the new apartment market has been one of the hardest hit. Scanning the Surfers Paradise and Broadbeach skyline, it would be fair to say that there is currently limited activity on the building front, with a lack of crane activity. Developers are still holding apartment stock from residential developments (predominantly medium and high rise projects) completed in 2008, purely because the resale market (of near new apartments) is too competitive on price.
A large proportion of new apartment product on the Gold Coast is sold to interstate and to a lessor extent, overseas investors at price levels which are considered to be in excess of local market values. The premium paid for new apartments is often not sustainable on resale, especially within a short holding term.
The sustained softening in values of new apartment product is not limited to Surfers Paradise and Broadbeach, but is also apparent in the northern and southern parts of the Gold Coast. The new and near new apartment market in Coolangatta has been underperforming for some 18 months now. The completion of a number of medium and high rise projects towards the end of 2007 and early 2008, in conjunction with the increase in supply of near new apartments coming back to the market at that time, has had a signficant negative effect on market values. Market conditions are in such a state at the moment, that a new apartment project nearing completion is likely to see a signficant settlement risk (ie. purchasers may forego their deposits and not settle because of the significant drop in market values). In this development, of the 43 contracts signed “off the plan”, 41 were signed in 2007, in much better market conditions.
From Southport to Hollywell, the new medium and high rise apartment market is also soft with similar prevailing factors as to those experienced in the central and southern parts of the Gold Coast. Stock levels are high and sales rates are low. The resale apartment market is considered an impediment to these stocks levels reducing. Developers however are utilising innovative marketing techniques, in conjunction with professional marketeers which entice potential buyers to purchase. Rental guarantees, cash backs, and fitout incentives are just some of these. These incentives are generally built into the price."Hope Island, which is considered an established good to prestige quality residential house location, is really yet to prove itself for medium to high density apartment living. Over the past 5 years there have been a number of large apartment projects built in this area, achieving only modest sales performance with most projects retaining considerable developer stock, some in the hands of receivers. There is currently approximately 300 apartments (in new projects) for sale in the Hope Island locality."
Here is text of an advertisement for the Pulse off-the-plan apartment complex:
"Best Value Apartment in Brisbane CBD. This 2 bedroom 2 bathroom inner city apartment located in the heart of Brisbane CBD is an unbelievable $499,000."
Advertisement by Martin Graham from Property Focus.
I am not sure how an apartment building that is almost in Milton could be said to be in the "heart of the Brisbane CBD"! Have a look at the photo from the advertisement -- you can't even see the CBD. This complex is close to Milton Road, Coronation Drive and with views of the Inner City By Pass.
And on what basis is this the best value 2 bedroom apartment in Brisbane??
Take care, because FKP's complex next door to Pulse (Vue) has had capital decline, not capital growth.
"HOUSING prices around the country rose nearly 2 per cent in August, the biggest monthly increase since researcher RP Data-Rismark began its tracking in 2005.
The August increase takes housing value growth to 7.9 per cent for the first eight months of the year, with Melbourne turning in the best performance -- an 11.6 per cent jump. ...
In a note yesterday, Mr Walters said an expected 25 basis-point interest rate rise next week, tighter lending standards, the Commonwealth Bank's move this week to lift its fixed mortgage rate, and the winding down of the first-home owner grant would all affect new development.
David Devine, managing director of Queensland-based residential developer Devine, said it was nearly impossible to secure funding from the banks for apartment and unit projects, irrespective of pre-sales.
Mr Devine said figures from researcher BIS Shrapnel showed there was demand for 175,000 new homes nationally each year."Source