Saturday, July 31, 2010

Auctions Today

According to APM, there were 16 auctions in Brisbane today, and only one property was sold. What does this tell you? Ray White seems to think that the market is good for sellers:

"Ray White CBD residential principal Brendan Tutt said demand for property in and around the city had remained strong and there was a shortage of supply.

“The best time to sell is when demand exceeds supply,” he said. “And that’s what the situation is at the moment.”"

See Ray White website

Friday, July 30, 2010

Australian House Prices Fall

"Aussie Dwelling Values Fall After 17 Consecutive Monthly Gains

30 July 2010

RP Data – Rismark Home Value Index Release

  • Capital city dwelling values down 0.7% in month of June with no growth over June quarter
  • Largest fall since April ’08
  • Rest of State dwellings also realise no growth in June quarter
After 17 consecutive months of solid growth, dwelling values across Australia’s capital cities recorded their first monthly decline of 0.7% (seasonally-adjusted) in June according to the market-leading RP Data-Rismark Hedonic Home Value Index. This was the largest monthly fall in home values since April 2008. The June outcome follows on from a clear trend in the decline in monthly seasonally-adjusted growth rates in Australia’s capital cities over February (+1.0%), March (+0.9%), April (+0.6%) and May (+0.3%)."

"Despite the recent moderation in capital gains, the risk of a dramatic decline in Australian dwelling values remains remote.

According to Mr Lawless, “As the RBA has independently confirmed, arguments in favour of house price “bubbles” remain, in my opinion, overstated. Australia’s housing market has a structural shortage of roughly 200,000 homes, which has been substantiated by the National Housing Supply Council. While the inventory of unsold homes has risen of late, our Market Activity Index suggests that new listings activity will slow over the coming months. And although average time on market and vendor discounting have also expanded with the weaker conditions, these remain in line with historically reasonable levels.”

“If we saw blow-outs in average time on market, re-listings, and vendor discounting, it would set off a few alarm bells.

This, however, is not currently the case” Mr Lawless said."

Brisbane apartment prices did ok.

Brisbane Apartments - medium prices
Month of June (indicative) - up 1.2%
Quarter - up 1.9%
Year to Date - up 5.7%
Year on Year - up 5.9%
Medium price over quarter - settled sales - $380,000

Brisbane Apartments - medium prices
Month of May - up 0.9%
Quarter - up 1.6%
Year to Date - up 4.5%
Year on Year - up 7.9%

Wednesday, July 28, 2010

New Vision Owner

The failed Vision tower site in Brisbane’s CBD has been sold to an Australian building and civil construction company following an extensive marketing campaign. The vacant site has been bought by Billbergia Group, which specialises in building and development, design, project management and facilities management.

Originally scheduled for completion in May 2012, Vision is a landmark development of a 5,478sqm site fronting Mary and Margaret Streets in the Brisbane CBD. The original designs included basement car parking, three levels of retail, 15 levels of office space, two observation decks and 53 levels of residential apartments.

“At this stage it is unclear whether the purchaser will build the original planned development. We will endeavour to obtain details from the purchaser with regard to their future intentions for the site and will provide further details to all stakeholders as these become available,” Campbell says.

The sale was negotiated by Jeff Dolan from Colliers International and Damian Winterburn from CapLand Real Estate Advisors, who jointly managed the sale process after receiving in excess of 10 offers.

Impacted by future development

There are alert services that let you know if your property may be impacted by a neighbouring development. For example, see:

Sunday, July 25, 2010

North Quay

Meriton is set to launch its Brisbane North Quay tower, to be called Infinity. This building will have a mix of 1,2 and 3 bedroom apartments. It appears that the apartments will be larger than in many current projects, but there are no balconies.
Some example floorplans and floorplates:

This should be compared with Evolution, which is the nearest apartment building of similar age. Evolution is not yet sold out, and two bedroom apartments that originally sold off-the-plan in Evolution for $650,000 range and now listed for sale in the $550,000 range.

Parklands at Sherwood Update

The unique Pradella development at Sherwood, "Parklands at Sherwood" has about 22 apartments remaining for sale. Stages 1 and 2 completed and settled last year. It is rumoured that Stage 3 apartments will start being sold off-the-plan this year. All North facing (parkview) 2 bedroom apartments have sold out. The village green view apartments will have a better aspect once Stage 3 is complete.

In my view, these apartments are a good size, with generally good floor plans (particularly when compared with recently released developments). It is worth comparing the 3 bedroom parkview apartments (which are about 150sqm total floor area) for less than $700,000 with the 2 bedroom apartments that are less than 90sqm for about the same price.

Some example pricing:

Two bedroom apartments

1. Two bedroom, 2 bath, plus large multipurpose room. 95 sqm internal plus 17 sqm balcony, for a total of 112 sqm, ground floor - $519,000

2. Two bedroom, 2 bath, separate laundry, large living room, 2 car parks and 2 storage cages, ground floor corner apartment - 91 sqm internal and 29 sqm balcony for a total of 120 sqm - $535,000

3. Two bedroom, 2 bath, top floor, 2 car parks, 83 sqm internal and 14 sqm balconey = 97 sqm total for $515,000

Three bedroom apartments

4. Three bed, 2 bath, separate meals area, separate laundry, overlooking parklands, corner apartment 117 sqm internal, 24 sqm balcony - $685,000.

5. Three bed, 2 bath, separate meals area, separate laundry, top floor, overlooking parklands, corner apartment 118 sqm internal, 31 sqm balcony, 150 sqm for - $695,000.

Sunland in Alice

What looks like an Alice in Wonderland building, we have Sunland filing a Development Approval for a 44 Level residential tower in Alice Street. Proposed 233 apartments, from 1 to 4 bedrooms each. They look larger than is typical in Brisbane new developments these days. (Sunland's Circle on Cavill development had large apartments too.) Located at 140 Alice Street, next door to Quay West, on the Carrington site.

McLachlan & Ann

The new Laing O'Rourke development near James Street in The Valley, called McLachlan & Ann (or M&A) has received development approval and is currently in pre-sales.

There are 234 apartments, with one bedrooms selling from $345,000 and two bedrooms from $485,000.

Saturday, July 24, 2010

Montague West End Pricing

Montague at West End is currently in pre-sales. Here are some example prices:

Level 11 (top floor) - 1 bedroom 1 car

Area: 69sqm total (53 sqm internal) plus balcony. The bedroom in internal with no windows. Kitchen is in hallway (galley kitchen). No laundry. Small -- keep in mind that a typical dulux hotel room is about 40 sqm.

Price $400,000

North facing with views

Similar floor plan on ground floor with courtyard

Total Area: 70sqm

Price $360,000

But there are even smaller apartments than this!

For example, a 1 bed 1 car apartment on level 2 is listed at $315,000

Area 48 sqm internal plus 6 sqm balcony for a grand total of 54sqm. This is a room, not an apartment!

A larger apartment, 1 bedroom, on level 8 is listed at $420,000.

This is 57 sqm internal, plus 20 sqm balcony, for a total of 77 sqm. The laundry is on the balcony.

Wednesday, July 21, 2010

Station 16 - South Brisbane

A new development from Aria, at West End is Station 16. Located at 16 Merivale Street, close to the off-ramp for the new Go Between Bridge. 60 apartments in total. One bedrooms from $335,000. Two bedrooms from $485,000.

"Station 16, offering 36 two bedroom apartments (including 5 Dual Key options) across 10 levels will take advantage of South Brisbane’s existing and future $4 billion infrastructure spend with the added benefit of an anticipated settlement date in 2012. The functional, contemporary, architecturally designed apartments that include European appliances tick all the boxes for the astute investor. With a selection of apartments boasting north-east facing aspect that provide outstanding Brisbane CBD views, you will want to be one of the first to secure your piece of Brisbane’s future."

West End - Montague

"...a limited opportunity to buy from the first round price list - elevated 1 bedroom apartments with secure basement car park from $315,000 and large 2 bedroom north and south facing apartments with sweeping views and secure basement car park from $560,000. These prices in West End represent undeniable value and it has been many years since we have seen this quality in an inner city project at such attractive prices. "

Unfair "off-the-plan" contracts

"People who buy properties off the plan will have greater protection from developers who wish to make last-minute changes to homes such as switching the light fittings or reducing precious floor space.

Property lawyers say new legislation about unfair contract terms could leave some developers exposed to contract terminations if they neglect to review their purchase agreements.

Common clauses in off-the-plan contracts allow developers to alter the size of the dwelling by up to 5 per cent or change inclusions and fittings without the purchaser's consent."


"This means that a number of usual clauses in off-the-plan contracts, which allow flexibility in developing the site, may infringe the restriction on unfair terms. For example, “no objection” clauses, where the buyer cannot object to changes to the building, the lot or the scheme, or unilateral rights to terminate in favour of the developer, may be unfair to buyers and therefore void. Developers need to be careful that including such clauses does not create a “significant imbalance” in the parties’ rights and obligations, that the clauses are reasonably necessary to protect the developer’s interests, and that they do not cause detriment to the buyer if a term was relied upon. Where these types of clauses are to be included, developers will need to include provisions to support the necessity to include such clauses (such as a financier’s requirements or changing council requirements)."

See Legal Alert

Buyer Gets Out of Contract with Mirvac at Tennyson

"it is declared that the applicant has validly cancelled, pursuant to s 214(4) of the Body Corporate and Community Management Act1997 (“the BCCMA”), the written contract entitled “Sale Contract Tennyson Reach” dated 4 December 2007 between the applicant and the respondent"

"The apartment was to be the principal place of residence for the applicant, her husband, and two teenage children. It was adjacent to the Queensland Tennis Centre (a major public facility) and a busy public thoroughfare. At the time the applicant’s husband’s occupation was such that the whole family might reasonably have a heightened sense of vulnerability to unlawful attack. The security system had been promoted as an integral feature of the development and arrangements for its management. Viewed objectively, a person in the applicant’s circumstances in August 2009 would be disadvantaged in a substantial way by its omission. That disadvantage was compounded by the omission of other items of property which would have enhanced the amenity of the apartment."

See also Changes to Your Development: When is a Buyer Materially Prejudiced? - Property and Commercial Services Update - May 2010

Tuesday, July 20, 2010

Negative Views

"For the first time this year, most investors surveyed are expecting house prices to remain flat or fall.

SENTIMENT among Australian property investors is turning increasingly bearish, according to the latest Investor Pulse poll of investors conducted by Colmar Brunton and BusinessDay.

For the first time this year, the number of investors expecting house prices to remain flat or fall outweighs those who see prices rising. The fundamental reason for the shift in sentiment is a dawning belief that Australian housing is in a ''bubble'' that at some point will burst and return to historic levels of affordability.

When asked about recent comments by famed US fund manager and property bubble expert Jeremy Grantham - who described Australian and British property as the only two of 34 bubbles he had studied that had not yet burst - 43 per cent of investors agreed that reversion to the mean would involve considerable pain. Only 25 per cent of investors disagreed with the bubble diagnosis and 32 per cent were undecided."

For Full Story and Chart, see Domain

Sunday, July 18, 2010

The Apple Brisbane

A small apartment building, called The Apple, is currently being marketed off-the-plan in Brisbane. The building comprises 1 bedroom apartments, which are 40 sqm internal, plus (for the most part) a 10 sqm balcony. There is one bedroom, one bathroom and a living room/kitchen. Very small. Priced from $339,000 to $560,000+. The apartments are located at 466 Ann Street, Brisbane and will block some of the views of the lower apartments in "Mantra on Queen". Compare Quay West one bedrooms, 74sqm with park views and a pool, for $450,000 or so, furnished.

Monday, July 12, 2010

El Dorado Indooroopilly

From an email from an agent:
"With over 70% of the apartments now sold Pretoria Property group are now finalising their construction finance so as to commence building the iconic apartments in October this year."
An email from the same agent a few days previous says:
"With the development earmarked to complete construction at the beginning of 2013..."

Thursday, July 8, 2010

How many bubbles?

There has been much discussion recently that the Australian housing market is 30% or more overvalued and is a bubble. However, recently, a respected stock analyst says that the stock market is way over valued, and that the Dow will drop from 10,000 to 1,000 soon. If that is the case, it is better to be in property than stocks (although cash may be better still!)
See Reuters.

Triguboff's View of Brisbane Apartments

"... In Brisbane the market is tougher and Triguboff may need to hold many of the apartments being built as an investment.

He says that it seems that as you go north prosperity declines with Melbourne the most prosperous city followed by Sydney a notch down and Brisbane two or three notches below Sydney. Prices of two bedroom apartments in Brisbane sell for about a 30 to 35% below Sydney, partly because of the lower cost of land and partly because of the lack of confidence in Brisbane.

However Triguboff believes, in time, the gap will narrow. Brisbane buyers' confidence has been shaken by the collapse of a number of apartment projects. But Triguboff believes that in time Brisbane will regain its confidence and he will have the apartments there to sell. ..."

From Smart Company

Monday, July 5, 2010

Comment from Prestige Agent

"I think we have seen it is a buyers' market at the moment," she says. "Our open home attendances are down by 30 to 40 per cent on last year."
I hope this agent is telling her prospective sellers this!

The Studio at St Lucia near University of Queensland

Last month, I wrote about The Studio development at St Lucia, located very close to University of Queensland. The developer released one of the two buildings to the market, and it sold out about 25 apartments in a week with no marketing.

There was an interesting comment about The Studio in Herron Todd White's July 2010 "Month in Review" as follows:

"High demand rental areas with reasonably assured income are a safe bet and one of our tribe suggested St Lucia is a good place to park the dough. The nearby university and ready access to facilities add up to strong demand. One development is claiming a 6.5% return on a $440,000 outlay for a double studio apartment design where both tenants share kitchen facilities. It’s geared towards cashed up, overseas students willing to part with over $250 per week per studio, which could prove to be a tall order. Our advice, if you’re interested in this type of investment, is to consider all options. Second hand multi bedroom units are offering a solid return and, more often than not, better capital growth potential compared to new stock. Just make sure you talk to one of our valuers before proceeding headlong into any under researched option."