West End - Montague - from agent's email

• BUZZING WEST END RIVERSIDE LOCATION
• INSPIRED DESIGN BY INTERNATIONALLY RESPECTED COTTEE PARKER ARCHITECTS
• RIVER, CITY AND PARK VIEWS
• LUSH, SUB-TROPICAL LANDSCAPED CENTRAL PLAZA
• LAP POOL, GYMNASIUM, RESIDENT REST & RELAXATION SPACES ON ALL ROOF TOPS

Bubble?

Is there a housing bubble in Australia?

See this article from The Trump and also this article.

See also comments on the RP Data blog and Domain.

Also:

"SQM Research founder Louis Christopher says vendors have "not yet woken up to the reality of the new market".

"There are fewer buyers out there. When houses are selling the best way to sell is at auction. But in a slower market, that's not the best way because you're not going to get as good a result."

"There are listings everywhere. We're in a situation now where buyers are backing away, but there are still people trying to sell. They're not going to get the prices they had hoped for, and it's going to be disappointing for them."

Christopher says that over the rest of the year, there will be an oversupply of stock in the market, which will put downward pressure on prices.

Additionally, he says property investors wanting to sell should have made their move in the first four months of the year. Now, he warns, they may have missed their chance."

See Property Market Has Cooled from SmartCompany

Waters Edge Update

There are some good photos of the construction of Waters Edge on the developer's website. The developer is currently advertising an X type apartment "from $645,000". This is a one bedroom apartment, with an internal study or second bedroom (no external windows).

Number of Unit Sales Decrease

Latest data from the Real Estate Institute of Queensland shows there were about 10,000 unit and townhouse sales in the six months ending March - 20 per cent less than those in the previous six months.

See Courier Mail

Gold Coast Oversupplied

Coast High Rise Demand Dries Up

The situation on the Gold Coast is not good. I wonder if everyone will be able to settle new apartment purchases in Soul and Oracle this year, when valuations are likely to come in under contract price. Note that Juniper's last project is SE Qld, Oceans, there have been no resales of apartments for more than the initial off-the-plan contract price -- with some owners selling at $200,000 or more loss. From the Gold Coast Bulletin:

"THE Gold Coast's high-rise market is at a standstill, with only 57 new apartments sold in the May quarter, the quarterly Midwood Report has revealed.This takes the total number of units sold since December last year to 115, the report shows.

Units in the city's biggest projects -- Oracle, Soul and Hilton -- are due to settle later this year. Settlement will depend on valuations, available finance and the circumstances of the owners.

Bill Morris, author of the report, said settlement of these projects would be the 'litmus test' for the market, with many buyers handing over deposits before the onset of the financial crisis, when unit values remained strong. He also said there was enough available stock for five years."

See also

http://www.goldcoast.com.au/article/2010/06/11/227041_gold-coast-real-estate.html

El Dorado Indooroopilly

The El Dorado Indooroopilly apartment development is still selling off the plan, and despite about 2 years of marketing, construction has not started. Some of the three bedroom apartments have been reconfigured as 1 bedroom apartments. The developer is now offering incentives for the smaller 1 bed apartments, which are small and the bedroom is fully internal (edited from an email from an agent):

Pretoria Property Group (developers of Indooroopilly’s ‘El Dorado Village Apartments’) has agreed to provide the following investment package.

Purchase as an investment property the A3 Type or A4 Type 1 bedroom apartments currently available for sale at El Dorado Village and Pretoria Property Group will provide to you from time of Settlement:

• Rental Guarantee @ 5% Gross rental yield paid for 2 years;

• Body Corporate fees paid for 2 years;

• Brisbane City Council Rates paid for 2 years;

• Supply and Installation of Door and Window coverings;

• Depreciation Schedule.

With the development earmarked to complete construction at the beginning of 2013, the above package will mean that the astute buyer will have nothing more to pay until approximately 2015.

So it begs the question, ‘if investors and upgraders are currently driving the residential property market then how much capital growth do you think residential property in Indooroopilly will achieve in the next 5 years’?

Recently in the ‘Matusik Market Update’ (dated March 2010) Michael Matusik stated that, “new apartments in both Toowong and Indooroopilly have seen consistent price growth in recent years. Last year the average annual gain was 5.9%, with owners making $102,000 in gross terms between sales. This compares well within just a 1% average growth rate for apartments across the Brisbane area during calendar 2009”.

In a recent article published by Investors Choice dated 1 June 2010 it was stated, “Brisbane will experience 10% per annum growth over the next 3 years” (click here to See Article).

With the suburb of Indooroopilly being a traditional high growth area the thought of purchasing a secure investment at today’s prices and watching that investment grow in value over the next 5 years is indeed very appealing.

El Dorado Village itself is a mixed-use development that comprises retail, cinema’s, commercial and residential tower. It has been identified that mixed-use developments such as El Dorado command higher growth due to greater demand to live in such complexes (click here to see extract from Michael Matusik).

This is a limited investor special and will only be provided to the first 10 buyers. One bedroom apartments at Eldorado Village start at $397,000.

RP Data April 2010 Index

In the month of April all cities recorded capital gains substantially less than the national average of one per cent per month in the previous 12 months, with Melbourne’s monthly growth rate halving from 1.6 per cent per month in the year to March to just 0.8 per cent in April.

Several cities recorded a dip in home values in April, with Brisbane values down 1.2 per cent, Perth values down 0.9 per cent and Darwin recording a 0.3 per cent fall. While both Brisbane and Perth have been consistently weak performers over the last year, Darwin dwellings have risen in value by 54 per cent since the start of 2007.

According to Tim Lawless, RP Data’s Director of Research, the April results are the lowest monthly capital gain since the end of the GFC-induced downturn in December 2008.

“A wide range of indicators have been hinting that a slowdown was on the cards. We are in a market now that has lower auction clearances, weaker home loan approvals, and lower consumer confidence. Combined with the six recent interest rate rises, and the fact that home values have recorded very large gains across key markets since the start of 2009, it is not surprising to see values start to track sideways,” Mr Lawless said.

Christopher Joye, CEO of Rismark International, added, “We have been forecasting a cooling in capital growth rates back down to single digit levels since October last year. Australian disposable household incomes rose by 11.5 per cent in 2009—unsurprisingly, the cost of housing increased by almost exactly the same amount. In 2010, disposable household income growth will be less than 5 per cent. Over the long-run, residential property values track purchasing power quite closely. We believe 2010 will be no different in this regard.”

Brisbane Apartments - medium prices

Month of April - down 1.2%

Quarter - down 0.4%

Year to Date - up 2.2%

Year on Year - up 6.8%

Medium price over quarter - settled sales - $375,000

Further Information Here and detailed information here

FKP's The Milton - in pre-release

The project is a mix of retail, commercial and residential development approved for 30 storeys above ground, at Milton Railway Station. It is approved for:

• 303 Residential Apartments in one and two bedroom configurations from level 2 to 30.
  
• First Floor Commercial.
  
• Ground Floor Retail outlets and Promenade.
  
• Almost every apartment has at least one Car Park.

One bedroom apartments with car parking start from $446,000.

Two bedroom apartments with car parking start from $640,000.

One bedroom apartments without car parking (there are only two of these available) start from $379,000.