Friday, September 30, 2011
The unit, along with another one in the complex he was leasing, was inundated during the Brisbane floods in January this year.
After the flood, which caused major damage to his unit and destroyed furniture, art and other belongings, Mr Dunworth said he discovered his unit was more than two metres below the 1974 flood level. He also discovered regulations that required the property to be set back 20 metres had been relaxed to allow his unit complex to be built just six metres from the river.
"I think if I had known all these things we would have considered making a different decision," he said.
He said sellers should be required to provide the information up front. Mr Dunworth said he believed that since a major property developer, Mirvac, was behind the project and it had the backing of the state government and planning approval from the Brisbane City Council, all necessary precautions would have been taken.
"I just assumed that the most stringent conditions were being imposed," he told the inquiry.
The values at Tennyson Reach have dropped by 30% to 50%.
Mr Kusher also highlighted the wide divergences in housing outcomes across Australia. In the 12 months to August 2011, Perth capital values fell by -7.1 per cent (s.a.). Yet in Sydney home values are up 0.3 per cent (s.a.). Total returns also vary markedly on a city-by-city basis. While Melbourne (-2.0 per cent), Perth (-2.0 per cent), Adelaide (-1.8 per cent) and Brisbane (-1.6 per cent) have all experienced negative total returns over the first eight months of 2011, Sydney (+3.4 per cent), Canberra (+2.8 per cent), and Darwin (+1.8 per cent) are in the black.
Analysis shows that the premium sector of the market remains the most volatile. The most expensive 20 per cent of suburbs have recorded capital value (ie, exclusive of rents) falls of -5.5 per cent over the last year compared with a - 3.1 per cent capital loss across the broad "middle" market and a -2.9 per cent capital loss amongst the 20 per cent of most affordable suburbs."
The chart below is for apartments only, not seasonly adjusted.
“The Brisbane result is encouraging following fairly sizeable monthly falls,” Kusher tells Property Observer. “It suggests Brisbane may be near the bottom of the market.”
Thursday, September 29, 2011
Ray White South Brisbane in its latest newsletter writes:
"Last night Ray White South Brisbane & CBD Residential again held it's monthly In Room Gala Auctions at the Greek Club with 19 properties going under the hammer. A busy night was had by all with over 200 people attending and 48 registered bidders on the night. 8 properties sold under the hammer & further negotiations are taking place on 4 other properties which should deliver over 60% clearance showing again that the 'hammer' beats a flat market."
But HS Brisbane Property's newsletter this weeks says:
"Love affair" with Auctions at an end! Once touted as the best way to achieve the best price, our 'love affair' with auctions seems well and truly at an end. Just on 80% of sellers in Queensland would want to sell their property through an auction, preferring to go through the "normal" private treaty sales process are even more sceptical, with a staggering 83%* avoiding auctions. The main reasons for buyers' steering clear of this type of purchasing process are:
Wednesday, September 28, 2011
SURGING body corporate fees have combined with price volatility in the wake of receiverships to continue the Gold Coast's ''miserable'' run of highrise unit sales this year. The Midwood Report yesterday revealed 49 unconditional sales of highrise apartments were recorded in the three months to the end of August.
This was down from 51 sales three months earlier and compared with 74 a year ago.
Report author Bill Morris said ''escalating'' body corporate fees were among the factors taking their toll on apartment sales on the Gold Coast as fees and apartment values headed in opposite directions. Mr Morris said the issue was a state-wide problem that was hurting returns for investors. ''Accordingly, the investment market has deteriorated quite dramatically,'' he said.
Mr Morris said the problem was more acute in older buildings but the failure of bodies corporate to allocate enough in sinking funds to meet maintenance issues was swaying potential buyers away from apartments generally.
He said the spate of receiverships in the Gold Coast highrise market, along with a tough stance taken by valuers, also had pushed potential buyers to the sidelines.
''Unconditional sales volumes of new apartments have continued to be miserable for the region since the beginning of 2010, averaging only 57 sales a quarter,'' Mr Morris wrote in the latest Midwood Report. The level of available highrise stock also dropped, with 618 new apartments remaining for sale the lowest in nine years.
Mr Morris said using the sales average of the past two years, the Coast still had 30 months' supply of highrise apartments. The picture for medium and low-rise apartments was even worse, with 24 and six unconditional sales recorded respectively in the three months to the end of August.
''This is a dismal result given that there are 611 new apartments currently for sale in medium-rise projects and 159 new apartments in low-rise projects,'' Mr Morris wrote. He said the State Government's $10,000 stimulus for new homebuyers could see a rise in sales over the remainder of the year.
"The glut of stock has come as sales volumes hit new lows in 2010 but the soften has slowed as prices have readjusted and interstate investors see value in Brisbane property. ... Research analyst Lachlan Walker warned that if the majority of projects were not overwhelmingly successful it would put further downward pressure on buyer confidence."
The article had a nice rendering from the Arden Property development at Albion called Eden. This is said to be a $215 million residential development, with 3 buildings of six storeys each, for a total of 280 apartments.
Sunday, September 25, 2011
- Centrus One at Eight Mile Plains
- Hamilton Harbour, 2 bed 100sqm from $715,000
- Eastwood Apartments, 2 bed 104 sqm from $498,000
- Fish Lane Apartments, 2 bedroom $555,000
- Rive Apartments, 2 bed 110 sqm $575,000
- Riverbend Tower, selling whole floors (5 apartments per floor)
- Allure West End
- The Midtown, 2 bed 85 sqm $563,500
- Alex Perry Residential, 2 bed 81 sqm from $560,000
- The Encore Indiana
- Madison Heights, 1 bed no carpark 56 sqm from $389,000
- Linear St Lucia, 2 bed 122 sqm from $487,000
- Essence Chermside 2 bed 84 sqm from $479,000
- Precinct Bulimba, 132 sqm $599,000
- Lawsons Edge
- Barton on Barton, 101 sqm $549,000
- Residences on Upper Oxford from $999,000
Saturday, September 24, 2011
Wednesday, September 21, 2011
"While the Aussie share market is still nearly 40% below its 2007 peaks, Australian house prices are about 10.3% above their pre-GFC highs. Notwithstanding this, we have had effectively no house price growth in nearly one and a half years while household disposable incomes have, according to the ABS, raced ahead at an 7% to 8% per annum rate.
The next major marker will be the August house price index data. This will be a crucial guide to whether Australia's housing market is experiencing an accelerating decline, as folks like the perennial doomsayer Steve Keen would have us believe."
See note by Chris Joye
Michael Yardney reckons property prices are likely to increase, in the next decade!
Tuesday, September 20, 2011
"Meriton Serviced Apartments will launch our in-demand and much anticipated hotel-style accommodation in Brisbane City in September 2011. Meriton Apartments two high-rise developments will change the Brisbane skyline and our serviced apartments will bring a fresh and much needed option to the city for both business and leisure travelers."
See Meriton website
Monday, September 19, 2011
However, it seems that Brisbane is yet to be fully mapped. There are some high level maps available, e.g. here and here, but from my experience in the floods, these maps show properties as flooded that did not flood.
Friday, September 16, 2011
Floor plan grid here, showing that 3 out of 38 apartments have sold.
One bedrooms priced from $315,000. Two bedrooms from $385,000. Three bedrooms from $445,000.
These prices seem relatively reasonable, when compared with suburban six pack developments.
I looked at the floor plans for a 1 bedroom plus study alcove. The smaller one bed (54 sqm internal plus 13 sqm balcony) was $325,000. A larger one bed with a bigger study area (64 sqm plus 13 sqm, which is a good size) was $335,000.
A two bedroom, two bathroom apartment was 74 sqm internal with 14 sqm balcony. It was a "floor through" apartment, with the living room at the front and two bedrooms at the rear. Some of the floor area was taken up with hallways. This was $395,000 or $402,000, for example, depending on the level.
A larger two bedroom, two bathroom apartment was 77 sqm plus 13 sqm balcony for $417,000. Again, a floor through apartment, with the bedrooms separated from the living area. This appears to be the most popular of the sold apartments.
Housing affordability remains a topical issue across most housing markets around Australia and many prospective home buyers are looking to minimise their debt by either purchasing a house in the outer fringes of the city or choosing an apartment located closer to the city. Both options have their pros and cons, however units are becoming an increasingly popular option, particularly amongst younger market segments like Gen Y’s and DINKS who like to live close to where they work and play.
Across the other large capital cities (Melbourne, Brisbane, Perth and Adelaide) the price gap between the median house and unit price is much less at around 18%. In dollar value terms that still represents a sizeable price gap; generally around a $70,000 difference and slightly more than $60,000 in Adelaide. Going forward we are likely to see apartments continue to garner a larger share of the market.
Twenty years ago apartments comprised only about 25% of all sales. More recently the proportion of apartment sales peaked at 36% in mid 2009. The fall away since that time is most likely attributable to both a slow down in investor and first home buyer purchases as well as ‘off the plan’ sales yet to settle which do not appear in the figures.
Extract From RP Data Premium Property Pulse
Currently in Brisbane, apartment sales are 27% of all sales.
The $850 million Surfers Paradise project has been 11 years in the making and Mr Juniper plans to see it through to the end.
"We have the complete support of our financiers and we are with this journey all the way through," the co-managing director of Juniper Group said. "We will be delivering this building and Juniper will be there -- it's that simple."
Settlements of the first stage of the apartment project began on Tuesday, a process expected to take months to complete.
The family-owned Juniper Group has contracts on 173 apartments in the first stage, but Mr Juniper could not disclose how many had settled.
He confirmed Juniper Group was still finding buyers despite the dire Gold Coast apartment market and that he had secured an unconditional 30-day contract for an apartment yesterday.
See Gold Coast Bulliten
I am not sure why settlement will take months. Usually, all settlements (even for a large building) are done in less than a week.
Wednesday, September 14, 2011
The list indicated the unnamed bank barred financing for all developments associated with the federal government's National Rental Affordability Scheme, an initiative designed to boost housing for low-income earners around the country.
It has been reported that most other banks have also refused to finance investors or buyers for NRAS properties, apart from St George, which accepts borrowers for one project in Queensland.
It has long been known that lenders often decline to provide finance for buyers of apartment buildings once they reach pre-set exposure limits, commonly when 15% to 25% of the total number of apartments have already been financed by the lender."
See Property Observer and The Age
Sunday, September 11, 2011
The article reports that more than $1 billion of apartments purchased at the top of the market are due to settle soon in The Oracle and Juniper's Soul developments.
Lawyers are apparently circling to try to get buyers out of contracts. For example, it is said that Nyst Lawyers believe buyers can get out of their Soul contracts because the Soul development is now being managed by Mirvac under the Sea Temple brand. What a crazy argument. The buyers want to get out of the contracts because the contract price that they promised to pay is now too much. The buyers took a risk, and lost out. You have to be very careful when buying off the plan.
The AFR reports that prices in Soul are down about 17%, based on one resale of a 23rd floor three bedroom apartment, 161 sqm, that sold off the plan for $1.8 million and resold in February this year for $1.5 million.
Completion is expected in late 2013 or early 2014. Construction is underway, with the seven level underground carpark complete, and work up to level 1 above ground.
Located on Melbourne Street, this development will have 48 apartments. One bedroom apartments are priced from $360,000. Two bedroom apartments are priced from $560,000. There will be only 5 apartments per floor. The building is 9 stories high.
Friday, September 9, 2011
- Apartments as Investments
- Buying Decisions
- Off the plan apartments
- Renting Your Apartment
- Foreign Investors
- Legal Structures for Apartments
Queensland’s unit and townhouse market shrugged off this year’s natural disasters and the current economic conservatism to record mostly positive results over the June quarter, according to the Real Estate Institute of Queensland (REIQ).
The REIQ June quarter median unit and townhouse report found the preliminary number of sales rebounded robustly across most of the State with median prices also holding firm.
REIQ managing director Dan Molloy said unit and townhouse sales were up about eight per cent compared to the March quarter courtesy of increased first home buyer and investor demand particularly.
For the Brisbane downtown area, the medium price for the June 2011 quarter was $448,000. This was up 0.1% on the previous quarter. The medium price for the 12 months to June 2011 was $475,000, up 6% on the 12 months to June 2010 (which was $448,000.)
Tuesday, September 6, 2011
Inner Brisbane suburbs Milton, Paddington and Rosalie are leading the charge, with figures from the Residential Tenancies Authority showing rent in these areas have risen by about 5.6 per cent over the past 24 months.
Mr Matusik said Milton was a prime example, where vacancy rates had plunged to just 0.7 per cent, with a vacancy rate under 3 per cent considered to be undersupplied. He said about two-thirds, or 62 per cent, of households in Milton were renting, which was representative of other inner city precincts. Mr Matusik said dwindling vacancy rates were not expected to improve in the short term, with the undersupply of new stock set to continue.
“For example, Milton has recorded the second highest population growth in Inner Brisbane at 4.4 per cent per annum over the past five years, just behind Kelvin Grove, which has led to its extremely low vacancy rate,” Mr Matusik said. “It is part of the Inner West precinct, which is one of the most undersupplied markets in Brisbane.
“Just 10 per cent of the current supply of new apartments for sale in Inner Brisbane are located in the Inner West, with FKP’s The Milton the only project currently selling off the plan.”
Friday, September 2, 2011
"Holiday units are typically returning a gross yield in the vicinity of 7% to 7.5% however after management fees etc, the net yield would be in the vicinity of 5%.
One of the drawbacks of owning investment property on the coast continues to be the additional levies that are being charged by the Sunshine Coast Regional Council. these are charged on all non-owner occupied properties, even when they are holiday homes which are not rented. this leaves a sour taste in the mouths of investors, most of whom are not locals who don’t have the opportunity to cast a protest vote."
Source: HTW Report
That said, there are some suburbs that were tarnished by the flood that offer excellent value for non-flooded stock due to the overall lack of buyer confidence. For example, st Lucia has a ready source of student renters, is close to the CbD and enjoys good local services, but its riverfront areas copped a hiding in January. As a result, the dry property (and there is plenty) has also had a downturn. not too long ago, one of our valuers had a look at a two- bedroom, three-level townhouse that sold for $400,000 and will easily see $430 per week in rent. A 5.5% gross return in this location is a very nice earner indeed. ...
General market conditions across the Gold Coast are very tight. only those properties where the vendor is willing to meet the market are selling. there is generally an oversupply of similar properties listed for sale. Feedback from locals within the property industry indicate that the market may not yet have bottomed out which is concerning potential buyers. Our opinion is that we are bumping along the bottom similar to the late 1990’s and that properties will sell within a wider value range depending on the circumstances of the vendor.<
Source: HTW Report
"Over the past ten years capital city home values have increased at an average annual rate of 6.8%, however it has been a tale of two distinct five year periods: the boom times during the first part of the decade and more subdued growth recently. ...