Admiralty Apartment Report

Colin Walsh from Ray White issued a report recently about the Admiralty Precinct. Here are some extracts:

Admiralty Quays

• "one of the most sought after residences within the Brisbane CBD"
• three bedroom sale for $1,350,000
• 2 bed type C average price 2010 = $780,000

Admiralty Towers I

• "Brisbane CBD's most tightly held residential apartment building"
• 5 sales recorded this year
• 2 bedroom sold for $750,000

Admiralty Towers II

• "one of the most prestigious and desirable buildings in the Brisbane CBD"
• 8 sales recorded this year
• 3 bedroom sold for $1,063,800
• 2 bed type C average price 2010 = $718,000
• 2 bed type B average price 2010 = $838,000

Skyline

• 15 sales recorded this year
• 2 bed type J average price 2010 = $582,500
• 2 bed type I average price 2010 = $647,100

Riverplace

• "most affordable riverfront residential building in the Brisbane CBD"
• 14 sales recorded this year
• 2 bed type E average price 2010 = $527,500
• 2 bed type B average price 2010 = $720,000

Macrossan and Soleil growing

A nice photo from Chris Hinds showing Macrossan Residents and Soleil growing, with Skyline to the right, and then Admiralty Quays and Admiralty Towers One.

Admiralty Precinct

Colin Walsh from Ray White CBD Residential is mailing out an interesting report of sales in the Admiralty precinct. He calls it his 2010 mid year report.

Summary of report:

Skyline - 10 sales, including Type J two bed average price at $570,000 and Type K three bed at $780,000

Riverplace - average price for Type B two bed reported at $720,000

Admiralty Quays - 3 sales: 1 bed at $590,000; 2 bed at $800,000; 3 bed at $1M.

Admiralty Towers One - 3 sales: including 1 bed at $575,000 and 2 bed at $750,000

Admiralty Towers Two - 7 sales: including 2 bed Type B for $850,000 and three bed Type F for $1,063,800.

Compared with 2009 average prices for comparable apartments, Admiralty One and Admiralty Two are the only buildings where the average price has increased across all apartment types in the first half of 2010.

Ray White Auction Results

Last Sunday, Ray White had a large scale auction at a Valley hotel, called an Urban Living Auction. There were a number of unique and prestige apartments and houses offered for sale. The results for the sellers were not good. More than 50 propeties were listed for auction, with only 17 selling on auction day (at the auction or shortly after).

"Ray White South Brisbane principal Dean Yesberg said 17 out of 54 properties sold on the day. “We had a large number of buyers and a positive response but the number of sales was down on previous years,” Mr Yesberg said. “Certainly the message we got out of the day is that owners need to bring their expectations back into line with the marketplace and what buyers are prepared to pay. People still want to buy but recent interest rate rises and current uncertainty in the world economy is starting to make people nervous. “It was a successful day but it was a tough day at the office.” Despite the lower than average number of sales on the day, Mr Yesberg expected more properties to be sold over the next week.

Press Release from Ray White

Some good apartments that did not sell include

• Quay West Sub Penthouse Apartment 2403
• Quay West Apartment 2006
• Admiralty Towers Apartment 123

Skyline

My favourite floorplan in Skyline (30 Macrossan Street) is the G2 floorplan. It is a 3 bed apartment, and most have 2 carparks. There is a big difference in views from lower floors (which have a good city street view towards the Marriott Hotel, and some river glimpses between Admiralty Quays and Admiralty One) and the higher floors, that have a river view over Admiralty One.

The downside with this apartment is that each of the 3 bedrooms will look into The Macrossan tower and the Soliel tower, both being built right next to Skyline.

Apt 401 in Skyline, which is this floorplan on one of the highest floors, is currently listed for sale for $899,000. The listing states: "This apartment has been priced for a quick sale at only $899,000+. It was independently valued at $990,000 in September 2009."

This apartment was sold off-the-plan in September 2004 for $770,000. The current owner paid $970,000 in November 2007.

The same apartment downstair, Apt 391, sold for $875,000 in October 2009, so my guess is that the independent valuer for 401 was wrong by $100,000! Also:

Apt 291 sold for $765,000 in October 2009.

Apt 281 sold for $755,000 in March 2009.

Apt 141 sold for $740,000 in February 2010.

Apt 91 sold for $707,500 in November 2009.

The developer has a number of this type of apartment still on his books, it seems.

Apartments for Sale in Brisbane

I looked at RealEstate.com.au to see what good apartments are for sale at present. These are quality apartments, in my view, and are relatively new. This is a good comparison when looking at off-the-plan developments and other apartments. All include car parking.

Two bedrooms

• Saville Southbank - 9th floor, river and city views, 127 sqm in total, listed at $780,000
• Quay West, 10th floor, 126 sqm, park views, just listed in the $700s with Colliers
• Parksland Sherwood, top floor, park and city views, one year old, includes separate study that could be used as third bedroom. 110 sqm in total, listed at $530,000
• Fresh Toowong, one year old, two pools, 134 sqm, listed at $555,000
• Riva Indooroopilly, river views, but only one bathroom, 90 sqm, listed at $535,000
• Ciana Indooroopilly, includes separate study that could be used as third bedroom, huge balcony, over 150sqm, listed at $649,000

Larger One bedroom in buildings about 10 years old

• Admiralty One, direct riverfront, level 12, 77 sqm listed at $600,000
• Admiralty One, side river views, listed at $449,000 or $485,000
• Quay West, 10th floor, river and park views, over 70 sqm, listed at $460,000

Selecting a 2 bed apartment

I am often asked what to look for when buying an apartment in Brisbane. Here are some general rules of thumb and issues to consider.

• How many apartments are in the building in total? If there are more than 200 apartments in the building, my opinion is that the building is too big. This creates many issues. One problem is that if you try to sell or rent your apartment, you will be competing with too many other apartments in the building. And there will be too many people using the shared facilities.
• How many elevators in the building, and what is the ratio of elevators to apartments. Moreover, the higher the building, the more elevators are needed. For some of the better buildings in Brisbane, there are 32 or 38 or 44 apartments per elevator. This is good. So using these ratios, a building with 400 apartments should have 9 to 12 elevators.
• How many apartments per floor? A larger floor plate usually results in a less friendly building and more security issues. I think that 6 apartments per floor is a good number.
• Is there a pool, gym and common room?
• Where is the building located? Avoid main roads and highways.
• Is there an onsite and live-in manager.
• How much money is in the building sinking fund. For a large building, this would typically be more than $500,000 (depending on age and size). A new building has a smaller sinking fund, and should have less problems.

For a two bedroom apartment, here are some additional considerations:

• What is the total internal size? Anything less than 85 sqm internal is too small for a two bedroom. There are good two bedroom apartments in Brisbane where the internal size is over 100 sqm.
• What is the total size, including balcony? This should be at least 95sqm. Here are some typical sizes of good 2 bed apartments in Brisbane that I have looked at recently - 132 sqm, 116 sqm, 128 sqm, 119 sqm. I would avoid any apartment without a balcony. (I saw a new Mirvac apartment on the Gold Coast that was 150 sqm internal, plus a 25 sqm balcony.)
• What is the width of the living room. Ideally, the living room should be at least 4 metres wide. A typical living room is 4m wide x 6m depth.
• A corner or floor-thu apartment will usually have better breezes and more light.
• Do all bedrooms have windows?
• Each bedroom should be at least 3m by 3.2m in size, plus built in wardrobe. Ideally, the main bedroom should have a wall that is at least 4m long.
• What is the external length of the apartment? This determines how much natural light the apartment will have. A good two bedroom apartment will have an 11 metre frontage, or more. (This is typically 4m for the living room, and 2 bedrooms of at least 3m each.) A two bedroom apartment in Admiralty Towers has a 12.3 m frontage on one side, which is great, plus another 7m down the side of the apartment -- a real bonus. I saw a 2 bedroom apartment recently that had only 7.7m frontage -- not enough -- the second bedroom was dark! A corner apartment or floor-thu apartment will have much more external frontage. For example, a corner two bedroom apartment at Parklands Sherwood has a 16.7 m frontage. Keep in mind that 1m makes a big difference here.
• Does the apartment have an internal laundry & store room in the apartment, or is the laundry in a cupboard?
• How many storage and linen and broom cupboards? Some apartments have none!
• Is the floor plan well designed. Not too much wasted space (e.g., hallways). Ideally, I like the bedrooms to be separated.
• What are the views, and could the views be built out?
• What floor? A higher floor is usually better, but not always. In the downtown area, try to be above the 6th floor at least.
• Two bathrooms are better than one bathroom. Some two bed apartments in Brisbane have two ensuites, plus a powder room for guests.
• Is there a both a shower and a bath?
• Does the apartment have a car park allocated to it. An apartment without a carpark is much harder to sell or rent. Sometimes, but rarely, a two bedroom apartment will have two carparks.
• Is there extra storage (for example, in the basement) allocated to the apartment.
• What are the quality of the finishes. See this post.

Not all apartments will be super apartments, and sometimes compromises have to be made. Price is also relevant! A two bed apartment for $450,000 will not be as good as a two bed apartment for $725,000! Or at least, I would hope so. So also look at price per sqm when comparing apartments.

NearMaps

Here are some great recent photos from NearMaps of various Brisbane apartment complexes:

• Fresh Toowong & Encore Toowong
• Parklands Sherwood
• Tennyson Reach
• Admiralty Precinct, including Meriton's new development (and here too)
• Newstead River Park
• Hamilton Portside
• Water's Edge site, Flow and Riverpoint
• South Bank, Arbour on Grey

Charlotte Towers, Festival Towers, Felix, Sebel Brisbane: here

Annual Rate of Return for Apartments in Downtown Brisbane

Often, there are statistics that are published that set out the change in the medium house or apartment price. These statistics are often not helpful. For example, if in one quarter there are many low end properties that are sold, and in the next quarter, there are many top end properties sold, the medium price will increase. Similarly, if there are new apartments entering the marketplace, this will most often result in an increase in the medium price for the area. However, in both these cases, you cannot say that values have increased.


I think that it is more useful to track the gains on resale of the same property over time. I have looked at three quality apartment buildings in Brisbane, namely Admiralty Towers, Admiralty Two and Quay West on Alice Street to see what capital gains owners have made. I have looked at all apartments that have been reported as sold this year (2009), and then looked back to see what the owner paid when first purchasing the apartment. In all but one case, the resale was the third or more resale of the same apartment. I have then calculated the Annual Rate of Return, using this calculator. The Rate of Return only looks at capital gains, and does not take into account rent received, expenses paid or transaction costs such as stamp duty or agents fees. Here are the results (with P-Price being the original purchase price on the P-Date; and Sell Price being what that owner received when reselling this year):

Lot	P-Price	P-Date	Sell Price	Sell Date	A RoR
Admiralty Towers One
5	$282,500	2/08/01	$520,000	25/09/09	7.77%
73	$490,000	19/10/06	$600,000	30/06/09	7.79%
76	$498,000	15/05/03	$685,000	31/08/09	5.19%
92	$510,000	21/03/07	$545,000	7/08/09	2.83%
119	$810,000	1/02/06	$1,200,000	19/03/09	13.36%
Quay West
23	$230,000	6/12/02	$420,000	8/07/09	9.57%
24	$435,000	16/05/08	$450,000	18/04/09	3.74%
49	$256,000	4/11/95	$425,000	25/09/09	3.71%
55	$310,000	10/05/04	$440,000	25/02/09	7.58%
68	$585,000	4/03/05	$675,000	11/10/09	3.15%
99	$400,000	13/08/96	$700,000	25/09/09	4.35%
120	$275,000	28/04/97	$460,000	2/09/09	4.25%
Admiralty Two
20	$445,000	13/09/04	$725,000	11/05/09	11.03%
47	$700,000	29/08/05	$945,000	1/09/09	7.77%
81	$720,000	23/11/07	$725,000	27/03/09	0.51%
94	$615,000	19/12/06	$730,000	7/05/09	7.45%
97	$340,000	20/02/98	$780,000	12/06/09	7.61%
106	$490,000	15/11/04	$750,000	24/06/09	9.67%
107	$485,000	1/02/02	$990,000	15/08/09	9.92%
124	$615,000	13/04/07	$750,000	19/10/09	8.20%
137	$432,000	22/03/97	$815,000	15/07/09	5.28%

Annual Rate of Return for Brisbane Apartments

Often, there are statistics that are published that set out the change in the medium house or apartment price. These statistics are often not helpful. For example, if in one quarter there are many low end properties that are sold, and in the next quarter, there are many top end properties sold, the medium price will increase. Similarly, if there are new apartments entering the marketplace, this will most often result in an increase in the medium price for the area. However, in both these cases, you cannot say that values have increased.

I think that it is more useful to track the gains on resale of the same property over time. I have looked at three quality apartment buildings in Brisbane, namely Admiralty Towers, Admiralty Two and Quay West on Alice Street to see what capital gains owners have made. I have looked at all apartments that have been reported as sold this year (2009), and then looked back to see what the owner paid when first purchasing the apartment. In all but one case, the resale was the third or more resale of the same apartment. I have then calculated the Annual Rate of Return, using this calculator. The Rate of Return only looks at capital gains, and does not take into account rent received, expenses paid or transaction costs such as stamp duty or agents fees. Here are the results (with P-Price being the original purchase price on the P-Date; and Sell Price being what that owner received when reselling this year):

Lot	P-Price	P-Date	Sell Price	Sell Date	ARoR
AD1
5	282500	2001	520000	25/09/09	7.77%
73	490000	2006	600000	30/06/09	7.79%
76	498000	2003	685000	31/08/09	5.19%
92	510000	2007	545000	7/08/09	2.83%
119	810000	2006	1200000	19/03/09	13.36%
QW
23	230000	2002	420000	8/07/09	9.57%
24	435000	2008	450000	18/04/09	3.74%
49	256000	1995	425000	25/09/09	3.71%
55	310000	2004	440000	25/02/09	7.58%
68	585000	2005	675000	11/10/09	3.15%
99	400000	1996	700000	25/09/09	4.35%
120	275000	1997	460000	2/09/09	4.25%
AD2
20	445000	2004	725000	11/05/09	11.03%
47	700000	2005	945000	1/09/09	7.77%
81	720000	2007	725000	27/03/09	0.51%
94	615000	2006	730000	7/05/09	7.45%
97	340000	1998	780000	12/06/09	7.61%
106	490000	2004	750000	24/06/09	9.67%
107	485000	2002	990000	15/08/09	9.92%
124	615000	2007	750000	19/10/09	8.20%
137	432000	1997	815000	15/07/09	5.28%