Friday, October 21, 2011

Lend Lease Puts On Its Big Show

The headline of a story in the AFR on Thursday:  "Lend Lease Puts On Its Big Show", a story about the Brisbane RNA Showgrounds development, Show Ground Hill.  The first 43 apartments (The Green) will go on sale soon according to the AFR, with the developer using a $2 million sales suite and marketing shows in Sydney, Singapore, HK and KL to drive sales.  It is said to be a 15 year project, with 2000 dwellings, so I guess if you miss out on the first release, you will still have a chance to buy later on.

Prices for the first stage are reported to be $345,000 for a one bedroom apartment without parking to $665,000 for a two bedroom apartment.  This is a higher price than what you can buy today for a three to five year old apartment in a more central location.

CBRE says that "there was little demand for three-bedroom units in the market following a glut of high-end owner-occupier stock was built in the mid 2000s."

Off the plan sales data shows average price points have fallen 50% from the 2007 peak according to the AFR.  This means that cheaper, lower quality apartments are currently being marketed, not that prices for like-for-like apartments being sold off the plan have decreased.

CBRE says "Eventually it has the potential to become its own suburb."  This means that when first being built, there will be little infrastructure or amenity nearby for the initial residents.  In 15 years it may turn out ok, but that is a long time to wait, especially if the average hold period for an apartment is about 5 or 6 years.

CBRE also says:  "The Brisbane market is quite challenging at the moment, but my view is we are at the bottom of the market."

No comments: