Sunday, December 30, 2012

South Point at South Bank

Anthony Johns Group appears to be pushing ahead with its Grey Street development at South Bank.  At one point, it seemed that Suncorp would move their headquarters there, but that fell through.  There has also been a SouthPoint website, but that now diverts to a new teaser website:

Aspect on Benson

A new apartment development, Aspect on Benson, in Toowong, is currently in pre-sales, selling off the plan.  It is close to Toowong Village.  But it is on a very busy road.

  • 73 spacious, high quality units over 8 levels
  • 1 bed, 1 bath, 1 car – $439,000 (Only 1 in complex)
  • 2 bed, 2 bath, 1 car – $535,000 to $595,000 (including furniture package)
  • Low body corporate fees (at least, initially).
  • Saturday, December 29, 2012

    Google Trends Shows Downward Trend

    It is interesting to look at Google Trends -- how many searches are conducted on Google for various topics.  Google Trends shows that there is a big jump in January each year for people searching terms such as "Brisbane rent" and "Brisbane real estate".  There was also a temporary spike in July and August this year.  Over the past five years, the trend has been downwards.  See this data set for example.

    Brisbane Rents

    Here is the median Brisbane rent for 2 bedroom apartments, as sourced from the RTA based upon information provided to the RTA when rental bonds are lodged or updated.  This does not distinguish between furnished and unfurnished apartments, and does not include lease renewals where the bond amount does not change.  This is for the September 2012 quarter.

    Post Code 4000 (Brisbane City): $585 per week
    Post Code 4005 (New Farm): $530 per week
    Post Code 4007 (Hamilton): $420 per week
    Post Code 4101 (South Bank/ South Brisbane): $510 per week
    Post Code 4066 (Toowong): $395 per week
    Post Code 4067 (St Lucia): $420 per week
    Post Code 4068 (Indooroopilly/Taringa): $385 per week

    There is a lot of good rental information on the RTA website at: Median Rents Quick Finder

    Do not use WhatRentMyHome.  This "service" is operated by a real estate agency, and the information it provides is inaccurate and out-of-date, and is misleading.

    Friday, December 21, 2012

    Rental Demand in Brisbane

    From an REIQ press release:

    As we head into the peak demand period for rental properties it is important for tenants to understand the attributes of successful rental applications, according to the Real Estate Institute of Queensland (REIQ).  Starting in January, demand for rental properties increases across the State.  Demand historically peaks during February and March when, based upon historical Residential Tenancies Authority data, leases for about 40,000 rental properties will be negotiated in just two months.

    According to rental listings by REIQ accredited agencies on, there are currently about 13,000 properties available for rent across Queensland.

    REIQ CEO Anton Kardash said as Queensland’s rental market had been in a state of undersupply for most of 2012, it was more important than ever for prospective tenants to understand the rental process.
    “Property managers generally use two equally important criteria when assessing prospective tenants for a rental property.  The first is proof of their ability to pay the rent as property managers have a fiduciary duty to the owner, or landlord, to effectively manage the risk of their client’s investment property.  Part of the rental process is to assess whether there is sufficient evidence from the prospective tenant that they would be able to meet the rent. The calculation is generally that rent should not exceed 30 per cent of the total income of all tenants named on the lease.”

    The second criterion is evidence of ability to care for a property. Proof of this criterion generally can be provided through a rental or home loan history and/or proof of previous living arrangements, references from previous landlords, and/or personal references.

    “In times of increased demand, landlords are also reminded that they must advertise their rental property at a fixed amount,” Mr Kardash said. 

    Thursday, December 20, 2012

    RP Data End of Year Round Up

    RP Data has released an end of year roundup video, looking at the Australia housing market.

    You can view the video here.

    Sunday, December 16, 2012

    The Long Decline in Australian House Values?

    Morning Money, an investment website, has recently published an article:  The Long Drawn Out Retreat in Australian Housing Prices.  It predicts, due to an ageing population, that Australia will not need more housing in the future, and that house prices will decline as baby boomers sell up or die.

    Whether the prediction is correct or not, I don't know.  However, I believe that apartments are more suited to an ageing population than stand-alone houses.  That is one reason I prefer apartments to houses.

    Saturday, December 15, 2012

    Soul Surfers Paradise

    The receivers of Soul have started a marketing campaign.  See  The pricing on the Internet seems to show high discounts for the more expensive apartments.

    Friday, December 14, 2012

    On the Market

    RP Data reports that there are over 88,000 properties advertised for sale in Queensland at present.  This is an increase from this time last year.

    BOQ's view

    "We've seen signs that it's bottomed and there have been a few good sales on the Gold Coast, Sunshine Coast and even Cairns,'' Mr Grimshaw said in Brisbane yesterday after BOQ's annual general meeting.

    Courier Mail

    Soleil Sale

    The Soleil apartment building in Brisbane has been complete for some time, but there are still many apartments that are unsold.  (One of the developer's associated companies appears to have purchased a number of the apartments.)  The developer, Meriton, is having another sale for those apartments that it has decided not to keep.  From what I can tell, for Australian buyers, all prices are negotiable.

    Wednesday, December 12, 2012

    Off The Plan

    Here is an article as to why buying an established apartment is better than buying off the plan.

    See Property Observer

    Saturday, December 8, 2012

    Viridian Noosa Massive Discounting

    The Viridian Noosa "resort" is discounting the unsold apartments.  The website states that one bedrooms that were $656,000 are now $280,000.  I doubt that this is correct -- most of the one bedrooms were originally sold for less than $600,000, so the discount is probably not as large as stated. Also, it will be interesting to see if they are selling the better apartments at this price, or only the apartments that look at the carpark.  The complex is managed by Outrigger, and is a long walk up the hill from Hastings Street.

    REIQ says demand is increasing

    Demand for units and townhouses is increasing across Queensland as buyers flock to this more affordable type of property, according to the Real Estate Institute of Queensland (REIQ).  

    The REIQ September median unit and townhouse price report, released yesterday, found the numbers of sales increased substantially over the period.  Across the State, sales of units and townhouses grew by 40 per cent in the September quarter, compared to the previous quarter. The numbers of sales were also up 14 per cent compared to the same period last year. 

     REIQ CEO Anton Kardash said the data also showed sales increasing for units and townhouses priced under $350,000.  "More than 800 preliminary sales were recorded for properties priced under $250,000, which is a very affordable price for many buyers. This was an increase of nearly 40 per cent on the same period last year.  The greatest numbers of sales was in the $250,000 to $350,000 price bracket, which recorded about 1,250 preliminary sales over the quarter - also an increase on last year.  Units and townhouses continue to be a reasonably priced, and also preferable, option for many buyers who want the convenience of living closer to the city while also keeping a lid on their borrowings." 

    There was a noticeable shift in demand for lower-priced units and townhouses in Cairns and the Gold Coast over the quarter with both regions recording significant jumps in the numbers of sales of properties for under $250,000. 

    In Brisbane, the median unit and townhouse price increased 0.6 per cent to $405,000 over the September quarter and also recorded a small positive price result over the year ending September. "Brisbane’s median unit price edged up 0.3 per cent over the year which is a welcome result and one we haven’t witnessed for a year or two now.  This is hopefully the start of the pricing turnaround that we have been anticipating given our property market has been improving throughout the year," said Mr Kardash.

    Double click image to make bigger

    Friday, December 7, 2012

    Lead Indicators

    RP Data has an interesting article about lead indicators, which are days on market and discount from original list price.

    See RP Data article.

    Wednesday, December 5, 2012

    Property Market Highlights

    HTW's Opinion

    As the full effect of the earlier cuts are yet to be observed coupled with the unknown global risks and expectation of slightly higher unemployment, it makes for interesting times for property participants and observers coming up to the "big sleep" over the Christmas / New Year period.
    Follow the link below for the December 2012 Month In Review:

    The Chelsea - an analysis

    Matusik has done a very interesting analysis of The Chelsea development in Bowen Hills, that recently completed.  It is worth studying this analysis.  See The Chelsea.

    Some points from the Matusik study:

    • More than half the sales were "rebated sales", making it hard to determine the actual sales price.  Most rebates were given early in the sales process.
    • It took about 2 years to sell the 177 apartments in the complex.
    • Only six apartments have been purchased by owner occupiers.  This is a very low percentage.  (My rule is to purchase only in buildings where there is a high percentage of owner residents in the building.)
    • 70% of the buyers appear to be Chinese, either from the Sunnybank area, Southern States, Singapore or elsewhere.
    • A number of apartments are now listed for resale, at about 10% below the recorded purchase price (before any rebates are taken into account).
    "Too often the last dwellings in a new project are discounted [by the developer].  This undermines the project’s overall value; is very unfair to those who bought early in the piece (regardless of what incentives were offered) and also reduces the developer’s profit (assuming there is any!)"

    Tuesday, December 4, 2012

    Market Flat, according to RP Data

    Dwelling values across all of Australia’s capital city housing markets, except Melbourne, rose over November with values now just -0.1 per cent lower over the past 12 months.

    Across the 8 capital cities, the month of November saw the RP Data-Rismark Home Value index rise 0.4 per cent during the first two weeks only to relinquish these gains in the last two weeks and finish flat for the month.

    As usual, there existed notable dispersions in the returns observed across the individual capital cities.  According to RP Data Senior Research Analyst Cameron Kusher, the November market conditions highlight that the road to a market recovery will not be without pauses and those cities which performed very strongly in 2009 and 2010, like Melbourne, may show continued weakness. “Capital city home values remain -5.6 per cent lower than their historic highs of 15 November 2010, but, up 2% from their low of late May 2012."

    Home values in Brisbane and Perth remain below where they were five years ago whereas the other mainland cities have all increased over this period. This has meant that relative to the other capital cities, Brisbane and Perth have experienced affordability improvements and subsequently we may see them become more popular from both an owner occupation and investment perspective.

    Brisbane apartment prices (to 30 November 2012):
    November 2012 - up 2.3%
    Quarter - up 1.2%
    Year to Date - down 0.7%
    Year on Year - down 0.8%
    Median price based on settled sales of Brisbane apartments over the quarter - $360,000.

    With interest rates falling again this month, the improvement seen in November may continue through the summer months.  BOQ has passed on a 0.2% rate cut, effective 21 December 2012.

    Monday, December 3, 2012

    HouseNet - real estate social media

    An interesting new website is HouseNet -- a social media site for property people.  The cost ranges from nothing to $79 a month, depending on what you want to use the site for.  The site is promoting itself as a replacement for Domain and

    As an aside, only takes listing from real estate agents.  If you are looking to rent, then don't forget to look at, which also takes listings from private individuals.  So there are different opportunities available on Domain.

    Sunday, December 2, 2012

    El Dorado Indooroopilly

    With PCM, the South African property developers, going bust, the El Dorado Cinema complex at Indooroopilly has been sold.  It is not entirely clear if the new owners will develop the same type of complex - apartments, shops, offices and cinema -- on this site.  See Courier Mail

    Saturday, December 1, 2012

    Skyline Sale

    Recently, a 3 bedroom apartment in Skyline Apartments sold for $700,000.   Many of the same type of apartment sold off the plan a number of years ago for more than this.  The pricing dropped at around settlement time to just over $700,000, and now it appears that $700,000 is market price for these three bedroom Skyline apartments.

    The trouble with Skyline is that it is not direct riverfront, and is crowded out by other buildings.

    Thursday, November 29, 2012

    Flood Check

    Before buying, it is worth checking the Floodcheck database and map.  See Floodcheck.

    Wednesday, November 28, 2012

    Mirvac Cancels Foreshore Hamilton

    Things can't be that good in the property market in Brisbane.

    "Mirvac has confirmed its refunding off the plan deposits for Brisbane and Townsville residential projects.  Construction was scheduled to commence on two key apartment projects this financial year, but given the limited sales and concerns on the off the plan market's immediate future looked, Mirvac's John Carfi confirmed to The Courier Mail that contracts had been cancelled and deposits refunded.

    The first stage of Foreshore Hamilton was to be a 23-storey building with 263 apartments. Only three of the apartments had been sold, the paper noted. Prices of one bedroom apartments started from $345,000.

     It was possible within about 18 months that Mirvac would reconsider a fresh start on both projects. Mr Carfi said despite there being strong economic fundamentals evident in Queensland, confidence was at an all-time low.  "With the Queensland market, it is difficult to see what the catalyst is going to be (to improve confidence),'' he said."

     See Property Observer


    The following is a note from a reader:

    Think you’ve found a nice quiet unit or apartment near the CBD, buyer beware!. I’ve found agents like showing near CBD properties in the quite weekday afternoon or Saturdays. This is because noise is generally at a minimum at those times and more importantly, no garbage trucks. But beware the week-night nightmare – industrial garbage trucks. 

    Most  apartment complexes have large industrial type bins these days as opposed to the traditional Council-type gray and green bins. Traditional Council-type gray and green bins are usually collected after onwards. With for example, 30 or more units in a complex, industrial bins will require emptying twice a week. My block has 80 apartments. The garbage trucks come 4 times per week. (Luckily, I had checked this out beforehand and found in advance that our Corporate Body let the contract on the basis they come after The big industrial bins need a big garbage truck and generally, no traffic or strings of parked cars to obstruct entry by these big trucks. These big garbage trucks usually start around mid-night precisely for the above mentioned reason, ease of access. And they make a LOT of NOISE. 

    I know many people who have found themselves in this predicament – the garbage collection three times weekly.  I have experienced it myself, woken up every night by the industrial bin collection rampage. I know people who sold up and left apartment blocks in both South Brisbane for exactly that reason. My friends in Milton did the same, sold up and moved because of the nightmare garbage truck four times per week, twice at their block and twice at the neighbouring block. My friends at Teneriffe did the same, sick and tired of “bang crash bang crash” at in the morning.  Hundreds of residents woken up long before the wee small hours, four times EVERY week.  And if your apartment block is near restaurants, expect even worse, hundreds of bottles being dropped into a steel garbage truck bin from the skip raised 3 meters above the truck. I once lived in a apartment block in New Farm. It was a nightmare. Every morning, industrial garbage trucks started banging and crashing as of It went on and on till daybreak as they went around the area servicing all the apartments  and restaurants.  Every day of the week including Saturday. I never slept one single night right through, at that unit. And I had to close the windows to sleep. I was glad to leave for good.     

    So, do some homework. Remember, you are about to part with $400-600K, or more. If you are seriously looking at buying a particular unit or apartment, ascertain the location of the industrial bin collection area. Is it right below your bedroom windows? Is it the large industrial type?  Is it accessed by large trucks? Do they arrive between 1.00am and 6.00am? Because if so,  run a mile.  Don’t bother asking the manager, he/she will tell you there is no garbage truck noise because they are well aware of the joke. Do ask to check the Corporate Body records to see if they have arranged day-time garbage collection. Even so, if the neighbouring apartments have not, you are still sunk. So go there yourself in the early hours of the morning with a coffee and a book, sit in your car till day break, Sunday to Saturday and wait it out to see what time the garbage trucks arrive and the noise level they make. Note what happens at what time at the apartments next door and within your area. You will be very well rewarded for just a few hours of your time.

    Tuesday, November 27, 2012

    Regrets and Traps

    What main regret did homebuyers have?
    Although the percentage of first homebuyers* who had regrets about their property purchase is fairly low, at 17.7% nationally (but up to 20.1% in Queensland), the main regret (with over 27% nationally) was that they wished they'd bought in a different area. This was followed by: they wish they'd shopped around more for a property; and, they wished they'd waited until they could afford a property that was closer to their ideal property. 
    Three 'traps' for first homebuyers
    Paul Osborne highlights three other 'traps' that, in his experience, first homebuyers may fall into:
    ·         Buying a property that is too common and has limited scarcity.
    “These include new construction apartments and generic housing estates".
    ·         Buying too far away from the CBD.
    “Buyers often have remorse about getting something bigger – but located further out.  They find they don't really need the extra space but truly value the convenience of being close to the city."
    ·         Emotional buying.
    “Many purchasers who engaged in emotion-filled auctions in 2009 and 2010 find themselves sitting in negative equity.  Some buyers regret how they bid at auction for their property." 

    Saturday, November 24, 2012

    Matusik's views on apartment bedrooms

    You see, we undertake between 40 and 50 Project Definitions every year – this is a service which helps make a new residential project work better – and we have found that in almost every case, one-bedroom apartments show a better gross rental return than larger ones.  This is particularly the case when you include a quality furniture pack.  Now before I get a bunch of emails outlining this and that, keep in mind I am talking about rental return here and not capital gain; although the statistics regarding one-bed resale performance versus larger apartments are pretty good too.
    So in short – the smaller the apartment type, in concert with the inclusion of a single car park, the better the gross rental return.  This rule of thumb is even more evident when you add furniture.
    See Gross

    Friday, November 23, 2012

    Agents Touching Up For Sale Photos

    An article in a Fairfax publication about agents editing and manipulating photographs in real estate listings.  See Article.  So take care when looking at listings online.  The property may not look as good in real life.  Maybe such agents should be called Unreal Estate Agents?

    Sunday, November 18, 2012

    Risks of Buying Off The Plan: NY Advice

    The Take-It-on-Faith Condo

     Rising demand and a scarcity of new apartments are creating something of a rush on new luxury condominiums, with buyers increasingly signing contracts for spaces even before they are built.

     This article includes advice about buying off-the-plan in New York.

    Saturday, November 17, 2012

    Recent Apartment Sales in Brisbane CBD

    Riparian Tower - Apt 4101 - 9 November for $3.3M after owner purchased it in June 2012 for the same price. [A reader has emailed me to say that this is incorrect.  I obtained this information from the RP Data database.  The 9 November sale information is as reported to RP Data by North South Realty.  The June 2012 sales data is from government records.]

    MacArthur Chambers - 229 Queen St - Apt 205 - 1 bedroom - sold for $540,000
    Apt 402 - two bedrooms - sold for $725,000

    M on Mary - 70 Mary Street - Apt 2302 - 1 bedroom, no car - sold for $341,000

    Festival Towers - 108 Albert Street - Apt 4105 - 2 bedrooms - sold for $452,000 (seller had paid $515,000 in 2007 off-the-plan buying from Devine).

    Riverplace - 82 Boundary St - Apt 167 - 2 bedrooms - sold for $495,000

    River City - 79 Albert Street - Apt 2706 - 2 bedrooms, 1 bathroom - $420,000

    Metro's Central Village

    Metro Property Development has announced a new project with over 1,000 new apartments.  It is called Central Village and is located at 66 Brunswick Street in the Valley.    This is a busy road.   It is not the greatest location either.  Even through it is called "Central Village", according to Google, it is an 18 minute walk (1.5 km) to the Emporium Hotel (shown in the photos on the website) and 1 km to the main part of the Valley.  Neither of these would be pleasant walks.  You should try the walk before buying!

    The first stage, called Cambridge Towers, has 163 apartments over 18 levels, mostly 1 bedroom apartments.

    See also Brisbane Times story.

    Tuesday, November 13, 2012

    Resiprofile - matching buyers and sellers

    Here is an interesting website, that aims to cut out the middleman (e.g. real estate agents):  See Resiprofile.  I have many examples of real estate agents not returning my calls or emails when I want to buy.  So I move on.  I wonder if the seller knows how hopeless their real estate agent may be.  It is always good to do a "mystery shopper" experiment on your real estate agent.

    Brisbane Transaction Volumes Increase!

    As shown in the above chart from RP Data, Brisbane transaction volumes for houses and apartments jumped recently.

    But the Brisbane property market is still well below its peak.

    There has been negative annual value growth over the past five years for Brisbane property.

    And no growth over the past year in Brisbane.

    Sunday, November 11, 2012

    High Hope for Bowen Hills

    There is talk that Bowen Hills will be the next boom area in Brisbane.  I am not sure that I agree.  There is little infrastructure at present, and no sense of community or neighbourhood.  It is a semi industrial area, surrounded by major roads, that is slowly being redeveloped with mostly low quality highrise apartments.  See AFR.  If the pricing was 30% of what developers are asking, then I may be interested, but at present, it seems way overpriced for what is in existence today.  My advice is to wait, and you could be waiting some time.

    Aircraft Noise

    Aircraft noise in some Brisbane suburbs is a serious concern.  With the new runway being proposed for Brisbane airport, there will be more noise in my suburbs.  It is so much of a concern that REIQ now has a tool to try to ascertain if a property is now or will soon be impacted by flight noise.  From an REIQ press release from Friday:

    The Real Estate Institute of Queensland (REIQ) and Brisbane Airport Corporation (BAC) announced a ground-breaking partnership aimed at empowering property buyers and agents through mutual education around current and future flight paths.  The partnership, which is believed to be the first of its kind in Australia, is the result of both organisations’ desire to prevent situations where buyers make an investment without fully understanding current and future flight activity near that property.

    Through this partnership, both the REIQ and BAC will use a collaborative approach to promote online tools that outline current flights paths and noise levels, in addition to future flight paths and areas of higher aircraft noise.

    BAC CEO and Managing Director Julieanne Alroe said: “We consider REIQ to be an excellent partner and we were delighted they welcomed our invitation to form a partnership for the good of the state and the industry.  With the REIQ’s property website,, going from strength to strength and the Institute being a leader in Queensland, we were impressed by both their reach and their focus on educating the industry.  It’s no secret that buying a property for residential or investment purposes is one of the most intensive and stressful things a person can do. The last thing we want to see is someone going through that process, only to find that they are not aware of a current or future flight path. These are long term decisions and we want people to feel as informed and empowered as possible."

    Sunday, November 4, 2012

    Juniper's Fire Sale of Retail Assets

    The collapse of the Soul development at Surfers Paradise must be really hurting the Juniper empire.  Juniper has listed what appears to be all its retail investments for sale, looking for offers this month.  Looks like a fire sale.  The Sea Temple Gold Club at Port Douglas is also for sale through the same agents, but it is unclear if this is also a sale by Juniper.  Many investors have lost money over the years buying from Juniper.  Now it is Junipers turn.

    To buy or not to buy a Queensland Unit?

    See here for a transcript of a conversation with property analysts, as to whether it is too risky to buy an apartment in Qld due to the changing strata laws and levy entitlements.

    Saturday, November 3, 2012

    Brisbane Apartment Median Sale Price Down Slightly

    The RP Data-Rismark Home Value index results for October recorded the first month-on-month decline since May 2012, with the eight capital city aggregate index falling by -1.0 per cent over the month. The fall was broad-based, with falls being experienced across each of the capital cities apart from Perth and Darwin. Both Sydney and Brisbane markets recorded a -0.9 per cent fall in values over the month, while Melbourne values experienced a larger -1.1 per cent fall.

    On an annual basis, only Sydney (+0.6%), Perth (+3.5%) and Darwin (+8.6%) have shown a rise.

    “Whether the October decline is a blip on the path to a recovering market, or a sign of further weakness is yet to be seen. Other indicators are suggesting the market has gathered some strength, with auction clearance rates holding firm around the 60% mark across the two major auction markets and owner occupier housing finance numbers showing steady improvements since February 2012, albeit from a very low base."

    While unit markets showed a more resilient performance across the combined eight cities aggregate index, with values down -0.6 per cent in October, compared with a -1.0 per cent decline across the detached housing market, the cities of Melbourne and Adelaide both recorded a larger -3.2 per cent fall in unit values over the month. In particular, Melbourne unit values have shown a greater decline in values than any other mainland capital city over the past twelve months, recording a 6.0 per cent drop.

    Brisbane apartment prices (to 31 October 2012):
    October 2012 - down 0.3%
    Quarter - up 1%
    Year to Date - down 2.9%
    Year on Year - down 4.4%
    Median price based on settled sales of Brisbane apartments over the quarter - $363,000.

    Property or Shares?

    According to RP Data, on a capital appreciation measure over the past decade, the past half-decade, and over the past three years, residential property has well and truly outperformed shares.  Over the most recent twelve month period shares have outperformed the housing market.  Property has less volatility than shares, but less liquidity.

    Sunday, October 28, 2012

    Portside at Hamilton

    The Portside Promenade apartment building is now complete.  The developer is advertising that 80% is sold, with the remaining 20% up for sale.  The developer is providing a discount of $20,000 off the list price, but I guess the discount will be higher if a cash offer is made.

    Thursday, October 25, 2012

    Trouble In Paradise - Soul

    The Soul apartment development in Surfers Paradise went into receivership today, most likely due to a large number of unsold apartments, pre-completion off the plan contracts that did not settle, and a falling Gold Coast market.  This is not a surprise.  The Oracle development at Broadbeach went into receivership last year.  At Soul, receivers were appointed over a number of Juniper companies.  Graeme Juniper, who developed a number of apartment complexes on the Sunshine Coast, bit off more than he could chew and got his timing wrong.  See Soul in Receivership

    Monday, October 22, 2012

    M&A Update

    The M&A (McLachlan & Ann) mixed use development is under construction on Ann Street in the Valley.  The commercial tower has topped out, and is currently being fitted out for commercial tenants, with a move-in date expected in March 2013.  The residential tower is up to level 8 out of 21 levels, and is reported to be on schedule for completion in late 2013.  From the photo below, it can be seen that the towers are in a commercial area of the Valley, so it will be interesting to see how a residential development changes the character of this area.  It also appears that the residential adjoins the commercial tower in an L-shaped configuration, which blocks some of the aspect from some of the apartments.

    Friday, October 19, 2012

    Low Vacancy Rate in Brisbane

    Residential rental vacancy rates have remained tight across Queensland, according to the latest REIQ data.  Findings from the Institute’s September Residential Rental Vacancy Rate Survey, compiled from information and data by REIQ accredited real estate agencies, showed most major regions posting vacancy rates of 2.5 per cent or less in September.

    According to REIQ, a vacancy rate of three per cent is considered to be the equilibrium point of supply and demand.

    REIQ CEO Anton Kardash said vacancy rates were continuing to trend into undersupply territory as investor activity slowly swings back into life. 

    "The rental market across Queensland has been constricted for more than two years now,’’ Mr Kardash said.  "The reasons for this have been the low numbers of investors in the marketplace as well as the generally slow property sales market over the period.  With the reduction in the numbers of properties being added to the rental pool, we are seeing more demand for a much smaller supply of properties."

    The survey found the vacancy rate for Brisbane at the end of September was 1.7 per cent - down from 2.1 per cent three months before.  Inner Brisbane’s vacancy rate was 1.5 per cent – down from 1.6 per cent. Property managers from REIQ accredited agencies said that market activity was slower over the period as was the case historically. Interest was also highest for new properties.

    Barefoot's Advice

    From the BareFoot Investor email:

    "You say that it's not good to be in too much debt. That makes a lot of sense to me, because I have two properties and I've just had a baby and I am in a huge amount of debt ... and ..."

    And that was all she could get out before she started sobbing uncontrollably.

    Turns out she works as an analyst at a major financial institution, and earns around $120,000 a year (i.e. she's not dumb, because dumb people generally don't earn six figures.)  Turns out she went to one of those property-flogging seminars I'm always warning you about - and ended up drawing the equity out of her home and buying a two-bedroom apartment in the currently deodorised armpit of Brisbane, for $490,000. Turns out that, after she signed the contract and bought the joint, she discovered she was pregnant. She wasn't in a committed relationship, but she'd made a commitment to her unborn child. She recognised that the financial stress was a danger to her pregnancy, so she decided to sell the property.

    And guess what her half-a-million-buck apartment got passed in for at auction earlier this year?  $250,000.

    This young woman is all alone. She has a two-month-old baby. She's scared about their future. And there's no fairytale ending coming her way. Despite improving property conditions, she's been stitched up good and proper.

    Lang Walker's View - No risk of housing bubble

    From the AFR on 17 October, page 43:  A story about property developer and investor, Lang Walker.

    "I saw that one of the guys from the Reserve Bank came out and was worried about a bubble.  He mustn't get out of his office.  We're definitely not at any risk of a bubble.  It's almost the opposition."

    On page 23, it was reported that Bank of Queensland, which lends to many Queenslanders, increased its bad and doubtful debt write-offs.  An Deutsche Bank analyst is reported as saying: "It is clear that conditions in SE Qld remain challenging and we believe that the bad debt environment for the banks over the next 12-24 months is likely to deteriorate."

    Woolloongabba Doubt

    Plans to sell and redevelop 10 hectares of prime Brisbane government-owned real estate have stalled in anticipation of a firm announcement about the Cross River Rail project. The Newman government has rejected the previous Labor government's plan to sell the valuable Goprint site at Woolloongabba to make way for a massive inner-suburb development. The site's future is now in limbo, with no decision on its redevelopment expected until the viability of Brisbane's proposed underground rail project is determined. See Brisbane Times

    Thursday, October 18, 2012

    Prices to Recover in Brisbane?

    According to BIS Shrapnel, Brisbane will have housing price growth of 3.9% in FY 2013, 7.8% in FY 2014, and 6.2% in FY 2015.

    This is a very bullish prediction.  It is interesting to look back on past BIS Shrapnel predictions to see how accurate they are.  See e.g.:  Report from two years ago, that predicted 5.3% growth for July 2011 to June 2012 for Brisbane -- way out!

    Below is an extract from the current report.

    No Queensland Housing Shortage

    Queensland does not have a significant undersupply of housing, according to Landmark White.  Demand was estimated at 154,000 homes against a supply of 150,000 homes, in the four years to 2010.  "There appear to be no short term concerns of a residential housing shortage" says Ms McDade in a report to clients.

    Contrast the National Housing Supply Council's State of Supply Report.

    Sunday, October 14, 2012

    Brisbane or Spain?

    "Mar de Canet’s 308 units were sold in less than 30 days last spring, mostly gobbled up by eager Spaniards finally getting a deal they could not resist: choice holiday homes for less than half the price of similar properties on the market. ...

    So many people showed up on the first day the Canet apartments went on sale here that Jesús Martínez and his wife, who were at work and planning to look the next day, called their parents to rush over and lay a claim for them. The couple bought a two-bedroom unit with a terrace and a parking place for $92,000."

    See Spaniards Grab Deals in Bank Sell-off of Homes

    Saturday, October 13, 2012

    Infinity Retreats to Serviced Apartments

    Meriton Apartments builds more than 1,000 units a year – recently it has shifted its attention to serviced apartments, holding back nearly half of the apartments in its 81-storey Infinity tower in the Brisbane CBD to be offered as serviced apartments.

    Meriton boss Harry Triguboff says Chinese buyers are retreating from the market due to the high Australian dollar and uncertainty in China as its economy cools.  Triguboff says that in the last three months Chinese buying has subsided, replaced (in Sydney) by first-home buyers taking advantage of new state government handouts.

    No one is sure why Brisbane did not immediately respond but it would seem that the severity of the state government cuts and the fears about what will happen to coal mining would have played a role. Again it is early days and addition a large part of the Brisbane building skills base is employed constructing the mines.

    See Property Observer and Business Spectator

    Smaller May Have Big Future

    The headline in a story today in the Courier Mail property advertorial section:  "Smaller may have big future".  Some points made in this article:
    • Buyer demand for new apartments in Brisbane is for smaller apartments
    • Owner-occupiers prefer larger apartments
    • But in the current market, most of the new apartment buyers are investors (about 85% of buyers) and investors are very price sensitive at present.
    • "With no desire to live in the property they are buying, they are purely looking at the return, and the best returns can currently be found in one-bedroom apartments."
    • In the current market, one bedroom apartments range from 45 sqm to 52 sqm and are priced from $345,000 to $425,000.
    • "The ideal mix [for a new development] is 70% one bedroom apartments and 30% two bedroom apartment."
    My strategy is never to buy an apartment that I would not live in myself.  I would not live in an apartment that was less than 70 sqm.  When owner occupiers decide to buy, there will be a shortage of larger two bedroom and three bedroom apartments in Brisbane.

    In another article today, Matusik says that Brisbane's CBD has 24% few apartments on the market compared with this time last year.

    Friday, October 12, 2012

    Recent Brisbane Apartment Sales

    Recent sales:
    • Riparian, 71 Eagle Street, 3 bedrooms on level 44, sold for $2.3 million
    • Charlotte Towers, 128 Charlotte St, Apt 1903, 2 bedrooms, 1 bathroom, sold for $465,000 (after being on the market for some time)
    • River City, 79 Albert St, Apt 2706, 2 bedrooms, 1 bathroom, sold for $420,000
    • River City, 79 Albert St, Apt 2106, 2 bedrooms, 1 bathroom, sold for $430,000
    • Admiralty Towers One, 35 Howard Street, Lot 110, 2 bedrooms, 2 bathrooms, sold for $535,000
    • Roma Street Parklands, Apt 6008, 3 bedrooms, sold for $1,220,000
    • Riverplace, 82 Boundary Street, Apt 82, 2 bedrooms, sold for $645,000
    • Casino Towers, 151 George Street, Apt 1604, 1 bedroom, sold for $347,000
    • Festival Towers, 108 Albert St, Apt 3402, 2 bedrooms, 2 bathrooms, $495,000
    • Aurora Towers, 420 Queen St, Apt 568, 2 bedrooms, $750,000

    Tuesday, October 9, 2012

    Gold Coast Down

    HOUSE and apartment sales levels on the Gold Coast have dropped to the lowest level in more than two decades. The city's residential property market continues to endure "a relentless downturn" in the wake of the global financial crisis, according to a 30-year market review by PRD Nationwide.

    See Gold Coast Bulliten

    Sunday, October 7, 2012

    The Capitol Apartments

    Forrester Properties is marketing The Capitol Apartments at South Brisbane.  Construction is under way, and according to documents provided by the sales agent, 70 of the 77 apartments have sold.

    The development is located at 35 Peel Street, and backs right onto the rail line.  Peel Street is a busy access street for the Grey Street Bridge, and is not a residential neighbourhood.  So this is a pretty poor location in South Brisbane.

    Although it is being sold as an apartment building, it is already being marketed as a hotel.  The sales agent says the the apartments are designed to be hotel rooms.  For example, looking at apartment 408, this is 68 sqm internal, and is a 2 bed 2 bath dual key apartment (i.e., a hotel room and a studio with a kitchen area along the wall).  One of the bedrooms does not have windows -- it is the back of the apartment, but as it is a hotel room, that probably doesn't really matter.  Although dual key, there is only one car park.  It is on level 4 and looks onto Peel Street.  If buying, care should be taken, because some banks will not lend for hotel room purchases.

    Apat 408 is listed for sale at $608,000, including furniture.  This seems to be extremely expensive.  Better located better quality larger two bedrooms can be bought in near new buildings for about $100,000 less.

    This apartment has a rental guarantee of $37,370 a year after agents fees, but before rates and body corporate.  So a net of about $31,500, or a return of 5% once stamp duty is taken into account.  (The developer misleadingly says that the net return is 6.15%, but ignores stamp duty, body corporate and rates when calculating the net return!)  At today's interest rates, this is still a loss.  And once the rental guarantee expires, I doubt that this small apartment will have a gross rent of more than $800 a week, which is what will be needed to accomplish similar returns to the rental guarantee.  (One can rent a furnished luxury 2 bedroom apartment at Saville/Mantra, which is 120 sqm, with river and city views, for less than $800 a week today.)

    But it seems that Forrester did a good job marketing The Capitol Apartments, if 70 have been sold to date -- poorly located, small apartments that are really nondescript unbranded hotel  rooms for high prices.

    Ugly Brisbane

    Chris Joye had APM (a division of Fairfax) conduct an analysis to determine in which markets most buyers have lost or made money.  APM looked at all properties sold since January 2009, and conducted an EVR (electronic valuation) on each of these properties to determine if the current valuation was more or less than the purchase price.  In Brisbane 71% of properties sold since January 2009 were now worth less than the purchase price, according to APM's valuations.  Who says that you can't have a capital loss when buying property?

    From my brief review of the property market in Brisbane (e.g., looking at listings and actual sales, talking with agents, making offers on properties, etc.) it seems to me that the situation in Brisbane is somewhat dire.  And it may not improve soon, and could get worse.  Even though interest rates are falling, a more important factor is employment -- and unemployment in Brisbane is on the increase.

    See Chris Joye's Another Cut article.

    Soul's Last Legs?

    Juniper agents are doing the ring around, with the "price has dropped" call for Soul at Surfers Paradise. Sounds like signs of desperation.  How long until Soul goes the way of Hilton and Oracle, and heads into receivership?

    Saturday, October 6, 2012

    Protest over Lot Entitlements Change

    GOLD Coast association Voice of Unit Battlers is marshalling its troops to ensure the Newman Government hears the concerns of unit-owners about its community-title Bill.
    President Philip Williams said the Bill "has the potential to make small units almost worthless" and their owners needed to make a stand.The organisation last week staged meetings at the Pinnacle and Q1 towers to encourage unit-owners to make submissions on the Bill to parliament's legal affairs committee.
    See Article and Prior Post

    Friday, October 5, 2012

    RP Data update

    If you are buying or selling in Brisbane, is your real estate agent telling you how bad the market actually is?  And it may not improve.  And it may get worse!  Click on slides above for bigger view.

    Harry Dent says Brisbane is Biggest Bubble

    "The greatest bubble in developed-country cities starts with Brisbane, Australia at 210% followed by 180% in Miami, 170% in L.A. and 165% in Vancouver. There are many cities that could see real estate drop 70% to 85%!"

    See Forbes

    Apartments v. Houses

    "The apartment market is not just more affordable to enter than the detached housing market but apartments are growing in prevalence in inner city areas and along the transport spines of many large cities. These unit markets are typically located close to major working nodes and nearby to entertainment and dining facilities as well as being close to public transport amenity. This week’s Property Pulse looks at the median ‘value’ of houses and units across suburbs nationally and determines the suburbs where you can make the greatest savings if you choose to purchase a unit rather than a house."

    Wednesday, October 3, 2012

    Brisbane Apartment Prices Still Going Backwards

    Australian capital city home values continue to rise with a 1.4% jump in September.

    The September RP Data Rismark Home Value Index results marked the fourth consecutive month-on-month rise in home values, further cementing the fact that a housing market recovery is underway.

    Capital city dwelling values rose by 1.4 per cent over the month of September, the largest month-on-month rise recorded since March 2010.  Adelaide led the way with the strongest results where values were up 2.4 per cent, followed by Perth at 1.6 per cent over the month, Sydney at 1.5 per cent, Melbourne at 1.4 per cent and Brisbane values up 1.1 per cent.

    Highlights over the quarter
    Best performing capital city: Darwin
    Weakest performing capital city: Hobart
    Highest rental yields: Darwin houses with gross rental yield of 6% and Darwin Units at 6%
    Lowest rental yields: Melbourne houses with gross rental yields of 3.6% and Melbourne units at 4.3%
    Most expensive city: Sydney with a median dwelling price of $522,000

    However, Brisbane apartments did not do so well.

    Brisbane apartment prices:
    September 2012 - down 0.8%
    Quarter - down 0.8%
    Year to Date - down 2.7
    Year on Year - down 4.5%
    Median price based on settled sales of Brisbane apartments over the quarter - $385,000.

    Sunday, September 30, 2012

    Meriton Infinity - Under Construction

    Some recent photos of Meriton's Infinity apartment building in Brisbane, currently under construction.  When complete, this will be Brisbane's tallest residential tower, at 81 floors.  So I guess it is about half way now.

    Infinity on the left, with Evolution Apartments on the right.  This was taken about two weeks ago.

    Infinity behind Evolution Apartments, with Federal Court building in the foreground.  Taken this weekend.

    From Roma Street Parklands, with one of the Pradella Parkland apartment buildings on the right.

    From Roma Street Parklands

    Friday, September 28, 2012

    Many Property Clocks

    "There are some signs of a recovery in the Brisbane property market, but it still remains firmly in a downswing , with investors seeking bargains in the unit market as new apartment projects are completed, says WBP Property Group. WBP places the Brisbane housing and unit market at five o’clock on the property clock.

    “Many purchasers who have bought off the plan have seen prices come off from original date of contract. Investors still remain wary as to when the bottom will be and are on the lookout for a bargain buy,” says WBP

    See Brisbane Downswing

    So we have some commentators saying that Brisbane is at 12 noon (top of the market, and set to fall) and others saying it is "on the cusp of improvement", and now at five o'clock.  Who really knows?  These are all just guesses.  Your guess is as good as theirs.

    Decline in Proportion of Apartment Sales

    "Although units offer a significantly lower price point at which to enter the housing market, the vast majority of sales across the country are for detached houses as opposed to units. The recently released 2011 Census data showed that 75.6% of occupied dwellings were houses highlighting that they well and truly remain the dominant housing type.

    Over recent years there has been a decline in the proportion of units sold, both nationally and at a capital city level. The decline can partially be attributed to the fact that more recent off-the-plan unit sales don’t enter into our figures until they reach settlement. The decline may also be as a response to first home buyer grants and stamp duty concessions that have been available, as well as recent falls in home values which has improved affordability. Unit values have typically recorded lower value declines than that of houses and this may be leading to buyers taking the opportunity to buy houses as opposed to units."

    RP Data: Why has the proportion of unit sales declined since 2009?

    Monday, September 24, 2012

    Self managing landlords

    One issue for landlords who self manage is obtaining access to  REA only allows agents to list properties for rent. allows individual landlords to list a property for rent.  In Brisbane, more people seem to use REA than Domain (although I suggest to people looking to rent to search both sites.)  Now there is a service that allows self-managing landlords to list on REA.  See

    Sunday, September 23, 2012

    Ten Percent Under Water in Queensland

    "Ten percent of Queensland homes are currently worth less than or equal to their purchase price while 36 percent are worth more than double the purchase price.  At the same time a year ago, 5.3 percent of homes were worth less than or equal to their purchase price and 39.3 percent of homes were worth more than double their purchase price.  These results highlight the growing impact of the continued underperformance of the Queensland housing market."

    From RP Data Accumulation Report, June 2012 Quarter (Report released September 2012)

    Brisbane is slightly better than the Queensland statistics.

    Saturday, September 22, 2012

    Kings Row, Milton Development

    Investa has gained approval for a property development on busy Coronation Drive in Milton, backing on to McDougal Street.  The three office buildings currently on the site will be demolished, and replaced with two residential buildings containing 293 apartments and two office buildings.  I wonder how these buildings will impact the views from FKP's The Milton project.  Details here.

    Hilton Surfers Paradise Price Slice

    Hilton Surfers Paradise Apartments advised "up to 34% off":
    • Level 29, 2 bedroom, 119 sqm, was $1,185,000, now $840,000
    • Level 38, 3 bedroom, 147 sqm, was $1,750,000, now $1,300,000
    • Level 30, 2 bedroom, 100 sqm, was $1,000,000, now $685,000
    According to Ray White Surfers Paradise, "the Chinese and Singaporeans have saved the Gold Coast property market" because "Australians have stopped buying over the last three years" in projects such as The Hilton and The Oracle.

    Advertised Rents

    In today's Courier Mail and on REA, the following new developments had apartments that were advertised for rent:
    • Mirvac's Park apartments at Newstead - 2 beds at $700 a week; 3 beds at $1000 a week; 1 bed furnished at $650 a week
    • Pradella's Urban Edge at Kelvin Grove - 1 bed from $345 a week; 2 beds from $485 a week
    • Metro Property's The Chelsea at Bowen Hills - 1 bed for $405 a week; or $324 via NRAS; 2 bedrooms from $510 a week

    Brisbane Apartment Recent Auction Results

    River Place - 82 Boundary Street, Apt 192, 2 bedrooms, sold for $605,000
    Aurora - 420 Queen Street, Apt 286 - passed in
    Skyline, 30 Macrossan Street, Apt 304 - passed in
    Admiralty Quays, 32 Macrossan Street, Apt 95 - passed in

    Recent Sales - Arbour on Grey

    Some recent sales for Arbour on Grey, at Grey Street, South Bank.  This building was developed by Mirvac about 10 years ago.

    Apt 2103, 3 bedrooms, 2 bathrooms, 2 car parks, level 1: $800,500
    Apt 2223, 2 bedrooms, 2 bathrooms, 1 car park, level 2: $610,000
    Apt 2320, 2 bedrooms, 2 bathrooms, 1 car park, level 3: $660,000
    Apt 2225, 1 bedroom, 1 bathroom, 1 car park, level 2: $400,000

    This complex rents well.  Currently, there are no apartments available for rent in Arbour on Grey.

    There is a 2 bedroom apartment currently for sale for $630,000.

    Friday, September 21, 2012

    Increase in Sales of One Bedroom Apartments in Brisbane

    "Research from Colliers and Place Projects reveals that there were 1,065 new project apartment sales Brisbane in 2007 and 1,278 in 2011.  The average sale price in 2007 was $688,000 with 54% of new units being 2 bed, 22% were 1 bed, 18% were 3 bed and 6% were penthouses or the like.
    The average sale price in 2011 was $560,000 with 45% of new units being under $550,000 (mostly 1 beds), 46% between $550,000 and $750,000 (mostly 2 beds) and only 9% for larger units. The sale of more affordable 1 bed units jumped from 22% to probably near 40%.  This accounted for the drop in the average sale price."

    One57 in New York

    "One57, a 306-metre tower under construction in Midtown Manhattan, will soon hold the title of New York's tallest building with residences. But without fanfare from its ultraprivate future residents, it is cementing a new title: the global billionaires' club. The buyers of the nine full-floor apartments near the top that have sold so far — among them two duplexes under contract for more than $90 million each — are all billionaires, Gary Barnett, the president of the Extell Development Co., the building's developer, said this week. The other seven apartments ranged in price from $45 million to $50 million. The billionaires' club includes several Americans, at least two buyers from China, a Canadian, a Nigerian and a Briton, according to Barnett and brokers who have sold apartments in the building, at 157 West 57th Street."

    Full story here

    Thursday, September 20, 2012

    SkyView Apartments at Urban Edge

    Pradella has commenced a soft marketing launch of Skyview Apartments, the third building in the Urban Edge development at Kelvin Grove.  Priced from $345,000.  Settlement expected in late 2014.

    Prices Up? But sales volumes are down

    ""Real estate is a confidence thing and confidence gets zapped by uncertainty and all the information we've been getting from overseas and at home has certainly zapped confidence."  Mr Kardash also noted the median house price provided a limited snapshot of the property field, because the figure could often be skewed by an inordinate number of sales at either the low or top end of the market in a given time period.  Like Mr Matusik, he said the 4.7 per cent drop in the median house price in the 12 months to June this year reflected the majority of activity which occurred at the lower end of the market.

    Mr Kardash said the Brisbane market was on the "cusp of improvement", although he noted the middle price range remained relatively stagnate.

    "Just recently the market's seen a little bit of a pick-up in the very top end ... but for us, we'd be looking at all three price ranges to be showing an improvement before you could call that the industry was on the way up," he said.

    Wednesday, September 19, 2012

    Brisbane Apartments Prices to Fall

    "The Brisbane inner-city apartment market is heading into a downswing due to the large numbers of off-the-plan projects currently being marketed in the Brisbane CBD and surrounding suburbs, according to property investment adviser Michael Yardney.

    Yardney, the director of Metropole Property Investment Strategists, places the Brisbane unit market at two o'clock on the property clock – 12 o’clock indicates the property market has peaked while 3pm indicates the market is in a downswing.

    Yardney expects there to be an oversupply of inner-CBD and near-CBD apartments in Brisbane for the next few years, causing prices to fall slightly.

    Most recent data put out by the Real Estate Institute of Queensland has unit and townhouse prices in Brisbane up 3.8% over the June quarter to a median of $402,500 – but down 1.5% year-on-year.

    Yardney says many of the Brisbane projects being currently marketed will remain unsold and this oversupply of properties will put downward pressure on prices and rentals.

    “Many of the apartments that have been sold off the plan are coming on stream in the next few years and have been purchased by investors.  Some will have difficulty getting finance and settling their purchase. Others will be disappointed to see the end value of their properties is less than their purchase price,” he says.

    Yardney assesses the Brisbane detached house market to be between four o’clock and five o’clock – still in a downturn but on the way to bottoming out.

    “House prices have dropped for the last two years in Brisbane.  Brisbane buyers are lacking confidence to re-enter the market and are sitting on the sidelines waiting for signs that the market has bottomed before they make a purchase. Many were waiting for the resources boom to reignite their property market, but recent negative media has again dampened confidence,” says Yardney.

    According to Yardney there are signs that the inner and middle-ring Brisbane home market is picking up, with more buyers returning and many properties now selling under a multi-offer scenario.

    “Brisbane is entering the stabilisation phase of its property cycle, but prices are unlikely to start rising until 2013.”

    Full Story on Property Observer

    Changes to Lot Entitlements, Again

    The Campbell Newman Queensland Government has decided to change the lot entitlement laws, yet again.  This adds more uncertainty for apartment owners and people intending to buy apartments.  It also enables a body corporate to reverse any recent changes made to their lot entitlements under the prior law.  So some apartment buildings will end up having 4 lot entitlement schemes within 4 years.  As a direct result of these changes, some apartment owners will have their body corporate levies increased, and a minority of apartment owners will have their body corporate levies significantly decreased.

    The Newman Government is clearly favouring rich penthouse owners over those owning the less desirable apartments in a building.  These changes will create further disharmony in some apartment buildings.

    Before buying an apartment in Queensland, you should make sure you fully understand the implications of these changes.

    Details see:  SSKB newsletter   (Story about old law that has now been repealed is here.)