Saturday, October 10, 2009

Gold Coast Going Backwards

Prices on the Gold Coast for apartments are going backwards. Some examples:

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.
So, everyone who bought in Artique and resold has lost money, more than $100,000 each. Buying off the plan is risky. Don't believe real estate agents and marketers who saying buying off the plan gives you a better price. Don't believe people who say that you can't go backwards with real estate.

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!
Features: Balcony
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.)

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