Sunday, March 21, 2010

Apartments for Sale in Brisbane

I looked at to see what good apartments are for sale at present. These are quality apartments, in my view, and are relatively new. This is a good comparison when looking at off-the-plan developments and other apartments. All include car parking.

Two bedrooms
  • Saville Southbank - 9th floor, river and city views, 127 sqm in total, listed at $780,000
  • Quay West, 10th floor, 126 sqm, park views, just listed in the $700s with Colliers
  • Parksland Sherwood, top floor, park and city views, one year old, includes separate study that could be used as third bedroom. 110 sqm in total, listed at $530,000
  • Fresh Toowong, one year old, two pools, 134 sqm, listed at $555,000
  • Riva Indooroopilly, river views, but only one bathroom, 90 sqm, listed at $535,000
  • Ciana Indooroopilly, includes separate study that could be used as third bedroom, huge balcony, over 150sqm, listed at $649,000
Larger One bedroom in buildings about 10 years old

Promised Infrastructure

I often visit off-the-plan sales offices for apartment projects, and I am often told about planned infrastructure. A new pedestrian bridge, or a new CityCat ferry stop, or a new bus route, or a new supermarket planned for a neighbouring or nearby site, or restaurants about to open. I go back a number of years later, and the planned infrastructure is still not there.

Sales agents often talk about stuff that will improve the area but that never actually eventuates. So be careful about such "promises". It is best to look at what the area is like now, because this is how the area may look for some time to come. Do not pay extra for future benefits that may never arrive. If they do arrive, then you will get some capital appreciation.

I walked around West End last night. A Saturday night. Boundary Street was alive and hoping. South Bank was busy and bustling. Montague Road was dead. It was dark and no people were around. Nothing was open. It is still a scary semi-industrial area. So be careful if buying into Flow, or Waters Edge, or Koko or Riverpoint. There is a lack of public transport, and it is a very isolated area. I would not walk home from the city at night to Flow or Riverpoint. The promises made by sales agents to me a number of years ago (new park, CityCat terminal, new coffee shops and restaurants opening, a new supermarket on Montague Road, a new bus route with regular buses for all the new residents) just did not eventuate. Still many light industrial uses and sheds for spray painters.

Saturday, March 13, 2010

Wave or Montague West End

Some more details about Wave West End which may have been renamed Montague.
See Development website. It is located behind Stockland's Koko.

Keen Walk

Keen got his prediction wrong, and is now about to walk. See and blog

See also Chris Joye

Mosaic The Valley

When I look earlier this week, Mosaic The Valley had not yet received Development Approval from the Council. Also, from what the agents are saying, they do not yet have enough pre-sales required to lock in finance to start building. It will be interesting to see if and when they start building Mosaic.

Mirvac's Waterfront - New "Park" release

Mirvac has started its pre-release sales campaign for the Park building at its Waterfront development in Newstead. From the materials I have seen, it will have about 100 apartments. The building is divided into two sections, Park North and Park South. There is a mix of 2 and 3 bed apartments, plus some 1 bedrooms at the back of the buildings. It appears that this building has no gym or pool.

The floorplans are very Mirvac. For example, the smallest 2 bedroom apartment has a floorplan similar to the two bedroom apartments in Mirvac's Arbour on Grey at Southbank. The difference is size. The Park two bedroom is 81 sqm internal with a 14 sqm balcony, for a total of 95sqm. The similar Arbour on Grey apartment is 106 sqm in total.

That being said, there are some larger two bedrooms, and all seem to be well designed. There are floor-thu apartments, with the living at the front and bedrooms at the rear. The two bedroom apartments range in size from 95sqm total, to 108sqm, to 112sqm, to 116 sqm.

In some of the 2 bedroom apartments, the living room is very small, and is only 3.5m wide, which in my view is too tight. Most of the apartments have the laundry in a cupboard, and have a galley kitchen along the dining room wall (and no island bench).

The building is way back from the river, on a park to be constructed -- the site was an old industrial site, and had contamination problems that have been cleaned up.

Mirvac plans about 7 other buildings for this site, so there will always be more apartments to compete with. Also, FKP and others are building on Newstead River Park site.That being said, it is generally a good location. See maps here and here and here.

What concerns me is price. An equivalent Mirvac two bed apartment, overlooking Southbank Parklands or the Brisbane Botanical Gardens would sell in the price range $650K to $800K, with sizes from 106 sqm to 132 sqm, and river views. It appears that these new Park apartments, although smaller and newer, will sell for $100,000s more than the current price for a quality Mirvac apartment in Brisbane.

And remember that Mirvac had over 15 apartments fail to settle at Tennyson, and they were resold about 20% less than the original sales price.

Riverpoint West End

Riverpoint at West End, stage one, is complete and owners are starting to move in. It would be interesting to know how many of the valuations came below contract price, and how many purchasers off the plan were unable to settle.

Riverpoint, stage one, still has apartments listed for sale. These include:
  • a "two bed one bath" (67sqm internal, so small!) where the second bedroom is internal with no windows, listed at $580,000.
  • a "three bed two bath" (81 sqm internal, which is in my view too small for a 2 bedroom apartment) with views of one of the other buildings, listed at $750,000.
I laugh that an agent has a 2 bed 1 bath listed for resale, at $550,000, giving the total area as 116sqm -- but this includes 17sqm of car park. Most other developers and agents do not include the carpark in the sqm area when selling an apartment, so take care!

I have inspected Riverpoint. The general quality looks to be very good. Some of the apartments are too small, in my opinion, and have bad aspects. The prices are high. There are many more stages of Riverpoint to come, so extreme care must be taken.

Friday, March 12, 2010

REIQ - December Qtr 2009

Locality Median Dec Qtr 09 Change over qtr" Median 12 months to end of
Dec 09
Change over 1yr" Change over 5yrs
BRISBANE (SD) $381,500 4.5% $362,000 2.3% 42.5%
BRISBANE CITY (LGA) $400,000 2.7% $386,500 1.0% 38.0%
ALBION N/A N/A $395,000 6.8% 59.6%
BOWEN HILLS N/A N/A $418,250 -1.6% 28.7%
BRISBANE CITY ~ * $456,000 2.0% $423,500 -7.9% 10.6%
FORTITUDE VALLEY $421,000 8.8% $402,500 7.9% 33.6%
GAYTHORNE $336,250 -3.7% $342,000 0.0% 57.2%
INDOOROOPILLY $472,500 8.6% $435,000 12.4% 40.3%
KANGAROO POINT $497,500 5.2% $450,000 -2.6% 23.3%
NEW FARM ~ $549,000 20.3% $460,000 -3.2% 29.0%
NEWMARKET N/A N/A $416,000 6.4% 44.7%
NEWSTEAD * $545,000 2.6% $530,000 -1.2% 43.2%
SHERWOOD * $400,000 -16.0% $427,700 N/A 71.1%
SOUTH BRISBANE ~ * $388,750 -5.2% $399,250 -8.2% 19.5%
SPRING HILL ~ $347,500 -13.1% $390,000 5.8% 47.2%
ST LUCIA ~ $403,000 -12.4% $448,750 -1.4% 60.8%
TARINGA $422,500 6.4% $399,500 8.0% 53.6%
TOOWONG $430,650 1.3% $415,000 0.4% 43.1%
WEST END * $504,500 -2.0% $509,000 -9.9% 64.2%

Apartment Sales Soften - REIQ

Continuing a trend in Queensland’s residential property market, the number of sales of units and townhouses reduced markedly during the tail end of 2009, according to the Real Estate Institute of Queensland (REIQ). The REIQ research report, Queensland Market Monitor (QMM), has found the number of preliminary sales of units and townhouses fell 24 per cent between the September and December quarters last year.

The number of sales under $500,000 was also down 28 per cent over the period.

REIQ managing director Dan Molloy said the drastic reduction in sales – especially in the affordable price range – mirrored the retreat of first home buyers from the market.

“Unit and townhouses are popular with first-time buyers as they provide a less expensive way into the property market, especially in South East Queensland,” he said.

“However, first home buyers have now fallen to lows not seen since the high interest rate environment of mid 2008 which means demand for this segment of the market has lessened.”

The latest Australian Bureau of Statistics housing finance figures show that lending for all Queensland buyers fell dramatically in January to be down some 20 per cent on the year before.

“The recent batch of interest rate rises, even though inflation appears to presently be under control, is obviously having an impact on the Queensland market with sales numbers well below what they were during the global financial crisis last year,” Mr Molloy said.

Across the State, the December quarter median unit and townhouse prices edged upwards as sales in the affordable end of the market softened.

Sunday, March 7, 2010

Views and off-the-plan contracts

In a recent court judgment, the purchaser was able to get out of an off-the-plan contract, because the ocean views were obstructed. This purchaser was smart enough to put in a special condition into the contract dealing with this issue. Most purchasers however look at brochures and listen to the sales agent, but don't put what was promised into the contract.

Selecting a 2 bed apartment

I am often asked what to look for when buying an apartment in Brisbane. Here are some general rules of thumb and issues to consider.
  • How many apartments are in the building in total? If there are more than 200 apartments in the building, my opinion is that the building is too big. This creates many issues. One problem is that if you try to sell or rent your apartment, you will be competing with too many other apartments in the building. And there will be too many people using the shared facilities.
  • How many elevators in the building, and what is the ratio of elevators to apartments. Moreover, the higher the building, the more elevators are needed. For some of the better buildings in Brisbane, there are 32 or 38 or 44 apartments per elevator. This is good. So using these ratios, a building with 400 apartments should have 9 to 12 elevators.
  • How many apartments per floor? A larger floor plate usually results in a less friendly building and more security issues. I think that 6 apartments per floor is a good number.
  • Is there a pool, gym and common room?
  • Where is the building located? Avoid main roads and highways.
  • Is there an onsite and live-in manager.
  • How much money is in the building sinking fund. For a large building, this would typically be more than $500,000 (depending on age and size). A new building has a smaller sinking fund, and should have less problems.
For a two bedroom apartment, here are some additional considerations:
  • What is the total internal size? Anything less than 85 sqm internal is too small for a two bedroom. There are good two bedroom apartments in Brisbane where the internal size is over 100 sqm.
  • What is the total size, including balcony? This should be at least 95sqm. Here are some typical sizes of good 2 bed apartments in Brisbane that I have looked at recently - 132 sqm, 116 sqm, 128 sqm, 119 sqm. I would avoid any apartment without a balcony. (I saw a new Mirvac apartment on the Gold Coast that was 150 sqm internal, plus a 25 sqm balcony.)
  • What is the width of the living room. Ideally, the living room should be at least 4 metres wide. A typical living room is 4m wide x 6m depth.
  • A corner or floor-thu apartment will usually have better breezes and more light.
  • Do all bedrooms have windows?
  • Each bedroom should be at least 3m by 3.2m in size, plus built in wardrobe. Ideally, the main bedroom should have a wall that is at least 4m long.
  • What is the external length of the apartment? This determines how much natural light the apartment will have. A good two bedroom apartment will have an 11 metre frontage, or more. (This is typically 4m for the living room, and 2 bedrooms of at least 3m each.) A two bedroom apartment in Admiralty Towers has a 12.3 m frontage on one side, which is great, plus another 7m down the side of the apartment -- a real bonus. I saw a 2 bedroom apartment recently that had only 7.7m frontage -- not enough -- the second bedroom was dark! A corner apartment or floor-thu apartment will have much more external frontage. For example, a corner two bedroom apartment at Parklands Sherwood has a 16.7 m frontage. Keep in mind that 1m makes a big difference here.
  • Does the apartment have an internal laundry & store room in the apartment, or is the laundry in a cupboard?
  • How many storage and linen and broom cupboards? Some apartments have none!
  • Is the floor plan well designed. Not too much wasted space (e.g., hallways). Ideally, I like the bedrooms to be separated.
  • What are the views, and could the views be built out?
  • What floor? A higher floor is usually better, but not always. In the downtown area, try to be above the 6th floor at least.
  • Two bathrooms are better than one bathroom. Some two bed apartments in Brisbane have two ensuites, plus a powder room for guests.
  • Is there a both a shower and a bath?
  • Does the apartment have a car park allocated to it. An apartment without a carpark is much harder to sell or rent. Sometimes, but rarely, a two bedroom apartment will have two carparks.
  • Is there extra storage (for example, in the basement) allocated to the apartment.
  • What are the quality of the finishes. See this post.
Not all apartments will be super apartments, and sometimes compromises have to be made. Price is also relevant! A two bed apartment for $450,000 will not be as good as a two bed apartment for $725,000! Or at least, I would hope so. So also look at price per sqm when comparing apartments.

Saturday, March 6, 2010

Lack of Privacy

In some apartment buildings, there is no privacy. I was in Waterfront Place recently, and had a great view into the bedrooms and living rooms of many Felix apartments. I could see a person asleep in bed. You can see Waterfront Place offices clearly in this photo taken from the Felix apartment building.

Indooroopilly Shopping Centre Expansion

Indooroopilly Shopping Centre is expanding again. It will be a negative impact to apartments on Belgrave Road. But this will probably add value to apartments a little further away, such as on Station Road or Riverview Terrace.

The plans are on the Shopping Centre website.