Tuesday, November 30, 2010
Thursday, November 25, 2010
In The Australian this week, a story about the Colliers Real Estate Agents Brisbane Apartment Report:
"Its Brisbane apartment report for the September quarter found a 56 per cent surge in the number of inner-ring unit sales, compared with the September quarter last year, for the area within a 5km radius from the central business district.
"Broadly speaking, the Brisbane apartment market is in a similar position in the property cycle as it was more than a decade ago," Colliers International Brisbane-based research analyst Lachlan Walker said. At that stage, "the market was looking more positive and just a few years from a major property boom".
The resounding theme was that the Brisbane apartment market had made strong progress in recovering from the effects of the global financial crisis."
Source: The Australian
Now my personal view: You have to take what Colliers says with a grain of salt. They are real estate agents, who are hired by developers and apartment owners to sell apartments. Of course they would sprout a positive outlook. The Brisbane inner city apartment market at the moment is not strong. Comparing this year to last year (which wasn't a great year) doesn't really say much. There has been little to no capital growth in recent times, and probably a decease in value. At present, there are more sellers than buyers; prices are not rising; it is uncertain what the rental market will be like in 2011, particularly if students do not come to Brisbane. The smart money is waiting on the sidelines -- buying an existing apartment in six months time (when prices will not be more, and will likely be less) looks like a good thing to do.
Wednesday, November 24, 2010
Thursday, November 18, 2010
Story from the AFR on Friday last week -- "Chinese love the Sunshine State". The article states: "Half a dozen significant high-rise properties on the Gold Coast and Brisbane, which are believed to have secured a significant proportion of foreign investors, are due to settle in the next 12 months."
See also Gold Coast Bulliten
Story from the AFR on Friday last week - "Banks judge Gold Coast apartments as vulnerable".
"Westpac Banking Corp has a particularly cautious view, especially of luxury properties worth more than $3M on the Gold Coast, which is described as a key area for 'additional risk management focus'. There are hundreds of apartments on the Gold Coast priced at more than $3M. At the Oracle development at Broadbeach, there are at least 50; at two other projects coming to completion - Juniper's Soul and Brookfield's Hilton - there are more than 100."
Story from The Australian today: "Gold Coast High Rise Stress Underestimated"
"MAJOR bank Suncorp estimates that less than 10 per cent of buyers are defaulting on several major apartment projects on the Gold Coast.
This apartment is back from the river, with terrace houses and a pool between the apartment building and the river. See Auction video.
Saturday, November 13, 2010
Unit rental growth over the last five years has also recorded significant increases in Darwin (84.0%) and Perth (61.7%). The three largest cities have recorded the lowest levels of rental growth at 39.6% (Melbourne), 40.6% (Brisbane) and 42.8% (Sydney). ...
Basically, the Adjudicator has upheld the protest that the 212 Margaret by-laws, which did not permit any pets at all, were invalid and unenforceable, and has ordered them changed to a permissive by-law. This dates back to a CCT ruling in 2008 (Tutton v Body Corporate for Pivital Point Residential) where the CCT magistrate ruled that total pet bans were unreasonable since certain species of animal could on no rational basis cause any difficulty to any other lot owner.
In addition, it appears there has been a further QCATA ruling in September 2010 -- McKenzie v Body Corporate for Kings Row Centre 28/09/2010 -- in which the tribunal decided that even by-laws that attempt to ban only a certain type of pet (cats and dogs) are also so unreasonable as to be effectively invalid and unenforceable. In that case, the disputed by-law was permissive of pets in general but attempted to outright ban only 'cats and dogs' specifically.
Essentially this all comes together to mean that a (or any! within a Community Titles Scheme) Body Corporate can no longer expect to ban pets (or any kind of pet) outright, even if they have already done so by voting in a ban/restrictive by-law, or even if the building was originally set up with a pet ban/restrictive by-law.
It also means that if anyone protests such a restriction, the Adjudicators will uphold their protest, allow the pet (if it's a reasonable request and there is no evidence of a reasonable reason the pet would be unsuited to the property), and forcibly change the by-law back to a permissive one. Just like they just did with 212 Margaret.
The flow on outcome from these rulings are clear: the face of Community Titles Schemes must now change - pets can no longer be banned, and Committees and Body Corporate's can no longer expect to stop people from bringing their pets to live with them in apartments, units or townhouses - unless they can provide reasonable grounds or evidence that the particular pet would be unsuited to the lot. From what I understand, this new thinking has already been tested multiple times in the Appeals process and the Adjudicators subsequent interpretation of this has also been made abundantly clear.
212 Margaret is now (forcibly) pet friendly.
Recently, the Domain property website had an offer -- Saturday's Sydney Morning Herald and the Sunday newspaper delivered in hardcopy for $10 total for 10 weeks. I thought that this would be good, so that I could look at the real estate advertised for sale in Sydney. So far, about 5 weeks into the subscription, I have received only 2 newspapers. And the Saturday SMH that is delivered does not include a real estate section. No wonder Fairfax is going backwards.
ONE of Australia's biggest developers has continued to sell units in a proposed $150 million Brisbane tower even though city planners have rejected the project.
Since marketing started a year ago, Leighton Properties has sold just over half of the 212 apartments in its planned Mosaic development at the corner of Ann and East streets in Fortitude Valley.
More than $4 million in deposits has been paid by 107 buyers - many of whom were told the 18-level residential and retail complex would be completed by late 2012.
But Brisbane City Council threw out the development application because of height concerns, forcing Leighton to file an appeal with Queensland's Planning and Environment Court in August.
Leighton state manager Andrew Borger said he met with council planners this week and the two sides were ''narrowing down the issues''.
If no deal is struck, a five-day court hearing has been set down for March next year.
Mosaic unit buyer Wagner Higgins said she recently learned about the question mark hanging over what could be one of the Valley's biggest developments.
''It does concern me because I would really like to live at that address,'' Ms Higgins said. ''But I don't think my money is at risk. The worst-case scenario is I get my money back.''
Ms Higgins, who paid a 10 per cent deposit, said Leighton representatives had been ''very forthcoming'' about the lack of approval and told her they were ''very confident'' it would proceed.
Yet she fears that her penthouse may disappear if height issues force a redesign of the project.
Council records reveal that planners also raised concerns with Leighton about the building's engineering, architecture and landscaping design.
Despite these hurdles, a Mosaic salesman last week claimed that approval was ''imminent'' and construction work would kick off in the first quarter of next year. A crane is already on site working on a neighbouring property.
In its appeal, Leighton said the Mosaic knockback had been ''overtaken by events'' since projects of ''greater building size, bulk and height'' had secured approvals in the Valley.
Among these were a council depot on St Paul's Terrace and a 20-level residential tower at Ann and McLachlan streets, the company said. But a council spokesperson said it was up to buyers to inform themselves before acquiring a property.
''Council strongly recommends people who are interested in buying units off the plan to satisfy themselves that the development has received all relevant development approvals prior to finalising their purchase,'' the spokesperson said.
Source: Courier Mail
Royal on the Park (the old Park Royal Hotel) owned by the Sultan of Brunei is to be resumed to build an underground train station. How will this impact Sunland's proposed development on Alice Street at Albert Street?
"ONE of Brisbane's major inner-city hotels will be resumed with 38 other properties for the city's first underground rail line, it has been revealed. ...
Under the plans the Royal on the Park hotel will need to be resumed, alongside 38 other commercial and industrial properties in Salisbury, Rocklea, the CBD and Bowen Hills."
At least you will be able to get free WiFi here.
Sunday, November 7, 2010
There were 3 auctions last weekend of 2 bedroom apartments in the Trilogy complex at Spring Hill (namely, apartments 226, 330 and 334)
The Courier Mail reported that apartments were passed in for $400,000 and $420,000 (about $150,000 less than the prices that the developer was seeking about 2 years ago).
These are relatively decent apartments, some with good views, and a large pool area. The apartments are not large (about 75 sqm internal) but are well designed. Not far from the downtown.
Listing at $490,000 (Apt 334, 51 Hope Street)
Listing at $490,000 (Apt 226)
Listing at $550,000 (Apt 330)
Listing at $680,000 (Apt 354)
A 2 bed, 2 bath sold in 2009 for $540,000.
"... Mr Punch alleged in his statement of claim that the original disclosure statement received from Niecon subsidiary South Sky Investments revealed that he was buying 'a lot in a residential building'.
If he were buying today, that disclosure statement would have to declare it was an 'apartment in a hotel', he said in the claim. ..."
This is a warning to developers who build apartment buildings (such as Aurora) and then sell the management rights to Oaks to operate a residential building as a hotel.
There are head-winds for investors in the Brisbane apartment market:
- slowing population growth
- foreign investors selling, because they profit from the high Aussie dollar
- foreign investors not buying due to the high Aussie dollar
- less foreign students, so less renters
- higher interest rates
Recent articles set out some of these concerns....
"QIC chief executive Doug McTaggart has painted a grim picture of the residential market in South East Queensland. ... "Population growth in Queensland is suffering." ... Herron Todd White estimated there had been a 30 per cent drop in volumes from 2008. ... vacancy rates are trending up at the moment ... the current Brisbane market is showing some oversupply... " Australian Financial Review, 4 November 2010, page 60
"Overseas students and retirees are fuelling population growth in Brisbane's inner city, with nearly 13,000 people now calling the CBD home. While Brisbane's fastest-growing suburbs are in the city's east and south, the growth of inner-city living is the perhaps the most visible change.
"A lot of the accommodation now is just built for students and they have just small kitchens," Ms McLean said. She said five of the unit buildings in Brisbane's CBD were mostly student accommodation.
"Some of them where the students are living are turning into ghettos," Ms McLean said.
"Down Albert Street, Mary Street, at the Parklands (apartments) there at Roma Street," she said.
Source: CBD bulges as more move in
Units in Brisbane are among the cheapest in the country as property prices in the city continue to slide, according to analysts.
The Australian Property Monitors September House Price Report, released today, shows the median unit price in Brisbane fell 2.8 per cent from $366,533 to $356,352 in the last quarter.
Brisbane's property market woes look set to continue for the forseeable future due a slump in migration and an oversupply in the market.
Analysts have tipped prices to remain stagnant or dip further at least until the middle of next year. ...
Property analyst Michael Matusik has long refuted claims of an undersupply in the owner-occupier and rental markets.
"Queensland's population growth is slowing - and significantly," he said. The state's net migration in 2008 was 84,275 people, with 21,228 arriving from interstate.
At the end of March this year, net migration fell to 55,845, with just 11,012 people coming from interstate.
"Our preliminary estimates suggest that more people are leaving Queensland now than arriving from interstate [due to the state economic downturn]," Mr Matusik said. Of the rental market he said: "The amount of vacant stock available is not only greater than most realise, but it is getting larger."
Mr Matusik said about 13,500 new rental properties were required to house 35,000 new residents to Queensland last year.
"Yet, 33,000 new rental digs became available - or over twice as many as was needed," he said. "This is not how I would define 'undersupply'."
Source: Property price slump