Friday, June 14, 2013
Leaving Brisbane
Many young adults live in apartments in Brisbane. But many want to leave. Brisbane is expensive, and is not yet a first tier city. I like Campbell Newman's new motto for Brisbane that sums things up: "Brisbane -- It could be worse!" As recently reported in England:
"But the Queensland capital’s younger residents are voting with their feet, seemingly unconvinced it is worthy of global renown." See The Guardian
"But the Queensland capital’s younger residents are voting with their feet, seemingly unconvinced it is worthy of global renown." See The Guardian
Risks of Investing in Mining Towns
An article from the AFR on Thursday, 13 June 2013 is a good reminder why investing in boom towns is more like gambling than investing:
Boom town burns investors: John Briggs of Port Hedland Real Estate predicts tough times ahead. 'Sales are few and far between. Anybody who invested in the last 18 months is in for a torrid time.' A banking source said lenders require potential buyers to have about 50% equity to buy into the former mining hot spot. 'Anyone looking to buy into towns like Port Hedland is buying at the wrong end of the market cycle,' said Gavin Hegney, a valuer.
Boom town burns investors: John Briggs of Port Hedland Real Estate predicts tough times ahead. 'Sales are few and far between. Anybody who invested in the last 18 months is in for a torrid time.' A banking source said lenders require potential buyers to have about 50% equity to buy into the former mining hot spot. 'Anyone looking to buy into towns like Port Hedland is buying at the wrong end of the market cycle,' said Gavin Hegney, a valuer.
Thursday, June 13, 2013
Wednesday, June 12, 2013
Monday, June 10, 2013
Sunday, June 9, 2013
Fire at Cathedral Place
There was a fire this afternoon in an apartment on the top floor of Cathedral Place. This building is located on the edge of Brisbane City, in the Valley. The building was developed by Devine, under the control of David Devine, now of Metro Property Group.
See http://www.abc.net.au/news/2013-06-09/residents-trapped-in-inner-brisbane-apartment-building-blaze/4742780 and Sun Herald
In my opinion, this is a very poor quality building, with small apartments, surrounded by main roads. I would always be extremely careful before buying or renting any apartment that was built by Devine.
Some apartments for sale in Cathedral Place: Apt 107, Apt 21, a one bedroom.
See http://www.abc.net.au/news/2013-06-09/residents-trapped-in-inner-brisbane-apartment-building-blaze/4742780 and Sun Herald
In my opinion, this is a very poor quality building, with small apartments, surrounded by main roads. I would always be extremely careful before buying or renting any apartment that was built by Devine.
Some apartments for sale in Cathedral Place: Apt 107, Apt 21, a one bedroom.
Skyview Apartments at Kelvin Grove
Pradella is marketing SkyView apartments at Kelvin Grove. These are part of the Urban Edge development. The other two buildings on this site have been completed. SkyView is currently in the early stages of construction.
The building is 14 levels. There are 174 apartments. Of these, 100 have one bedroom; 60 have two bedrooms and 14 have three bedrooms.
As at late May 2013, about 20 apartments had sold.
Prices range as follows:
The building is 14 levels. There are 174 apartments. Of these, 100 have one bedroom; 60 have two bedrooms and 14 have three bedrooms.
As at late May 2013, about 20 apartments had sold.
Prices range as follows:
- One bedrooms -- $326,000 to $484,000
- Two bedrooms - $506,000 to $705,000
- Three bedrooms - $789,000 to $889,000
Examples of apartments for sale:
- Apt 31010, level 10, 1 bedroom, bedroom at rear of apartment with no views, 51 sqm internal, 70 sqm total - $466,000
- Apt 30709, level 7, 2 bed, 2 bath, second bedroom at rear with no views, 81 sqm internal, 103 sqm total - $654,000
- Apt 30501, level 5, 3 bed, 2 bath, 114 sqm internal, 137 sqm total - $829,000
Urban Edge Apartments at Kelvin Grove
Pradella has completed two of the three buildings in its Urban Edge complex at Kelvin Grove. The "Horizons" building recently completed, and residents have moved in. The Skyview building, the third of the buildings on the site, is in early stages of construction.
Horizons is an 11 storey development, with about 133 apartments. As at late May 2013, about 40 apartments were available for sale. The majority of these apartments are on the Ramsgate Street side, facing west, and not with city views. I counted 20 one bedroom apartments available for sale on this side of the building.
Some example apartments that remain for sale:
Horizons is an 11 storey development, with about 133 apartments. As at late May 2013, about 40 apartments were available for sale. The majority of these apartments are on the Ramsgate Street side, facing west, and not with city views. I counted 20 one bedroom apartments available for sale on this side of the building.
Some example apartments that remain for sale:
- Apt 20808, level 8, 1 bedroom, 52 sqm internal, 66 sqm total, $429,000
- Apt 20506, level 5, 2 bedrooms, 2 baths, 72 sqm internal, 85 sqm total, $550,000
- Apt 21105, level 11, 2 bedrooms, 2 baths, 76 sqm internal, 91 sqm total, $584,000
- See also REA listings
These apartments appear to be of good quality construction. However, I don't like high-rise where the air-conditioning compressor is located on the balcony and where there are aircon headends on the walls. For a number of apartments, the kitchen is just a row of benches on the wall, and the dining area is in this kitchen space. (That is, no separate room or even an island bench-top for the kitchen.) Some of the bedrooms have very small windows.
TDD Peninsula at Kangaroo Point
Peninsula at Kangaroo Point is currently being marketed by TDD. One bedroom plus study from $370,000; two bedrooms from $425,000 to $620,000. Video here, that doesn't really say much. This is being marketed as a "riverside" development. Take care -- this is not a riverfront development. In fact, it is much closer to the highway that goes across the Storey Bridge and the exit to the Clem7 tunnel than it is to the river. See map here.
Matusik touts 38 High Street development
An interesting video regarding the 38 High Street apartment development in Toowong, next door to the RE pub. Look here. One bedroom apartments from $339,000.
FKP's Albion Project
FKP is promoting its The Hudson at Albion Hill project. See www.themillalbion.com.au.
Quote from Courier Mail advertorial, 8 June 2013 from FKP's general manager of developments:
"Overwhelmingly pivotal in all deals has been the size of apartments... This difference is real, it matters and its definitely a deal-maker. People want space in an apartment."
The advertorial highlights a 2 bedroom, 1 bathroom apartment that is 67 sqm. In my view, a 67 sqm two-bedroom apartment does not have space! This is a tiny apartment. One of these apartments is advertised at $399,000.
Quote from Courier Mail advertorial, 8 June 2013 from FKP's general manager of developments:
"Overwhelmingly pivotal in all deals has been the size of apartments... This difference is real, it matters and its definitely a deal-maker. People want space in an apartment."
The advertorial highlights a 2 bedroom, 1 bathroom apartment that is 67 sqm. In my view, a 67 sqm two-bedroom apartment does not have space! This is a tiny apartment. One of these apartments is advertised at $399,000.
BOQ warns about one bedroom apartments
"Bank of Queensland is worried about a surge in people borrowing money to invest in small apartments, citing Brisbane and Melbourne as concerning spots.
Of particular concern was self-managed super funds (SMSF) engaging in the tactic, BOQ CEO Stuart Grimshaw said. He said the assumption was these one-bedroom apartments would appreciate in value, but it was a "risky part of the market" for heavily borrowed SMSF funds.
"I don't think it's long before ASIC will start looking at some of the sales methodology," he said."
Source: Courier Mail, page 77, 8 June 2013.
Be warned!
Of particular concern was self-managed super funds (SMSF) engaging in the tactic, BOQ CEO Stuart Grimshaw said. He said the assumption was these one-bedroom apartments would appreciate in value, but it was a "risky part of the market" for heavily borrowed SMSF funds.
"I don't think it's long before ASIC will start looking at some of the sales methodology," he said."
Source: Courier Mail, page 77, 8 June 2013.
Be warned!
Saturday, June 8, 2013
Ryder says Brisbane apartment market is heating up
A commentator named Terry Ryder says that the Brisbane apartment market heats up. See story on Property Observer website. However, take care reading this. The article is based primarily of sales of new and off-the-plan apartments. What is not stated is that these sales often made to foreign investors, who cannot purchase existing apartments due to FIRB rules. When looking at resales of existing (i.e., not new) apartments, the story is different. For example, the REIQ report, mentioned in a post yesterday, shows that less than 1 apartment per day sold in the March 2013 quarter in downtown Brisbane.
Ryder also says that consumers (I suspect he means foreign investors) have a preference for 1 bedroom apartments over 2 bedroom apartments. My guess is that this is because new two bedroom apartments being sold by developers are overpriced.
Ryder also says that consumers (I suspect he means foreign investors) have a preference for 1 bedroom apartments over 2 bedroom apartments. My guess is that this is because new two bedroom apartments being sold by developers are overpriced.
Brisbane Property Prices
RP Data reports that Brisbane property prices are increasing, but looking back five years, the annual change in capital values is still negative. That means, on average, a person who purchased five years ago has made a capital loss in Brisbane.
Friday, June 7, 2013
Property Sales in Brisbane
RP Data reports that the number of sales of houses and apartments in Brisbane is more than 15% below the rolling five year average. The number of sales is slowing increasing.
HTW Valuer's Month in Review Report
HTW Property Valuers say in their recent monthly report that, for apartments, the Brisbane market is improving, the Gold Coast market is declining, and the Sunshine Coast market has bottomed out.
[Click chart to view]
[Click chart to view]
REIQ reports that apartment demand is increasing
Sales of units and townhouses across Queensland have strengthened further over the last year,
according to the latest Real Estate Institute of Queensland (REIQ) data report. Over the March quarter, the preliminary numbers of unit sales in Queensland increased by 2 per cent
compared to the same period last year.
But it is sales in our major tourism centres of Cairns and the Gold and Sunshine coasts that are the real story with sales sky-rocketing over the past year in these areas.
“The popularity of units and townhouses in our major tourist precincts has returned,” REIQ CEO Anton Kardash said. “These areas have experienced the highs and lows of the GFC, and the strength of the Aussie dollar, more than most over the past four years so it is heartening to see them stepping back into the light. Many of these areas have also become more affordable, even those with unique seaside locations, so this is no doubt spurring buyers into action before the tide has turned to the positive completely.”
But it is sales in our major tourism centres of Cairns and the Gold and Sunshine coasts that are the real story with sales sky-rocketing over the past year in these areas.
“The popularity of units and townhouses in our major tourist precincts has returned,” REIQ CEO Anton Kardash said. “These areas have experienced the highs and lows of the GFC, and the strength of the Aussie dollar, more than most over the past four years so it is heartening to see them stepping back into the light. Many of these areas have also become more affordable, even those with unique seaside locations, so this is no doubt spurring buyers into action before the tide has turned to the positive completely.”
Monday, June 3, 2013
A Declining Market
For the month of May, dwelling values declined by -1.2
per cent across the RP Data-Rismark combined
capital city index. The May fall was the second
consecutive month-on-month decline, with values
down -0.5 per cent in April following a 2.8 per cent rise
in values over the first quarter of the year.
"Given the weak housing markets of 2011 and 2012 were followed by a very robust 2013 first quarter, we may well be seeing some natural market volatility associated with vendors acquiescing and taking the opportunity to sell."
Brisbane apartment prices (to 31 May 2013):
May 2013 - down 1.7%
Quarter - down 0.4%
Year on Year - up 1.5%
Year to Date - up 1.1%
Median price based on settled sales of Brisbane apartments over the quarter - $375,000.
With a number of businesses in Brisbane continuing to make employees redundant, or implementing a wage and hiring freeze, it is hard to see things getting better in Brisbane any time soon.
"Given the weak housing markets of 2011 and 2012 were followed by a very robust 2013 first quarter, we may well be seeing some natural market volatility associated with vendors acquiescing and taking the opportunity to sell."
Brisbane apartment prices (to 31 May 2013):
May 2013 - down 1.7%
Year on Year - up 1.5%
Year to Date - up 1.1%
Median price based on settled sales of Brisbane apartments over the quarter - $375,000.
With a number of businesses in Brisbane continuing to make employees redundant, or implementing a wage and hiring freeze, it is hard to see things getting better in Brisbane any time soon.
Saturday, June 1, 2013
Pet Disputes
It is becoming common for owners to seek permission to have a pet, for the body corporate committee to refuse, and for the body corporate committee to be overruled. See recent cases:
- Cat allowed in Eden by the Bay
- Cat allowed in Horton Apartments
- Decision not to allow dog by body corporate suspended for further review
- Dog allowed and bylaw prohibiting animals struck out
Car Spaces
According to Matusik in the Courier Mail today: "The premium for a car space within a new inner Brisbane development ranges in prince depending on the location, but the average cost is close to $75,000." He said that apartments without carparks are harder to sell.
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