Saturday, March 17, 2018

Fire Sale

"A mass apartment fire sale could be set to swamp Brisbane in the next 12 months — allowing would-be first home buyers to finally get a foot on the property ladder. 
The inner city housing market is in the grip of an apartment glut thanks to a “record boom” in high-density dwelling construction, according to economic forecaster BIS Oxford Economics.
But it means now could be the best time to bag a bargain.
Managing director Robert Mellor is predicting a frenzy of discounting by developers to take hold for at least another year, with prices for remaining stock in some projects to be slashed by at least 10 per cent to 15 per cent."

Saturday, March 3, 2018

No Price Growth for Brisbane Apartments

RP Data CoreLogic have issued their Home Value Index Report for March 2018.

The medium price for apartments has dropped from $400,000 in April 2017 and $389,000 in August 2014 to $383,000.   This price decline does not take into account stamp duty or agents fees.  For example, a person buying an apartment for $400,000 a year ago, really paid $412,000 including stamp duty, and selling it for $380,000 today is only receiving about $368,000 after agents fees.  So the loss is actually $44,000 or about 10% loss.  It appears that the loss is going to increase over the next few years.

I suspect that anyone who purchased an apartment after 2010 would be selling at a significant loss if having to sell today.

CoreLogic head of research, Tim Lawless, said, “The overall softening in the market becomes more evident when looking at the change in values over the past three months.” 

Brisbane apartment prices (to 28 February 2018)
February 2018 - no change
Quarter - down 0.3%
Year to Date - up 0.1%
Year on Year - down 0.6% 
Median value - $383,000

New or resale apartment?

I am often asked whether it is better to buy a new or a resale apartment.  Often, you get better value in a resale apartment.  There are less marketing and agent costs, and the seller does not have to achieve a price to satisfy a bank or investors.  A resale apartment may have an older kitchen or bathroom, but will often be larger.

Before buying a new off the plan apartment, look at what is available today for resale.  For example, this apartment in Admiralty Towers Two, on a high floor, is listed for sale at $749,000.  This is in a good location on Queen Street, near the Marriott Hotel and the Howard Smith Wharf development.   It is direct river front, has excellent views, deducted air-conditioning (not a split system) and is 116 sqm (much larger than most new two bedrooms.)  Currently, it achieves $670 a week rent.

Grim View of Brisbane Apartment Market

Independent property valuer HTW paints a very depressing view of the apartment market in Brisbane.  HTW says that it is a falling market -- prices will decrease.  Many new apartments are being sold for above market prices.  Rental demand is weak.

Thursday, March 1, 2018

Beaches have Upside

Apartment values in Noosa and Mooloolaba are on the rise again, driven by Sydney buyers.

These beaches were recently highly rated by TripAdvisor.