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:  www.lastpieceofsouthbank.com

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).

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  This "service" is operated by a real estate agency, and the information it provides is inaccurate and out-of-date, and is misleading.

Money and Markets

  Shop Amazon Money

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 reiq.com, 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. 

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.

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.

Soul Surfers Paradise

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

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.

Off The Plan

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

See Property Observer

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

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.

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: http://htw.com.au/Month_in_Review/Month-in-Review-December-2012.pdf

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!)"

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.

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 RealEstate.com.au.

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

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

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.