REIQ Quarterly Report

The real estate agent's industry group, REIQ, released a report this week into the Queensland residential property market.  From the REIQ press release, which is always somewhat optimistic:

"THE house market has rebounded from a period of low listings with a surge of stock, in some markets as much as 100 per cent more in the March quarter, according to the REIQ’s March Quarter Queensland Market Monitor.

Looking at southeast areas where the market is performing well, the Gold Coast and Sunshine Coast were the two strongest performing markets in Queensland again this quarter, outperforming Brisbane (as they did last quarter).

The Sunshine Coast continues to grow and, along with the Gold Coast, these centres formed the top two most popular migration destinations for people moving within Australia in 2016.   More than 12,000 people moved to these two coastal destinations (excluding overseas immigration) last year, according to ABS data.

Noosa was the top annual median house performer with an annual growth of 9.2 per cent compared with March 2016. This has positioned Noosa as the second-most expensive house market with an annual median sale price of $615,000.

The unit market over the past 12 months has begun to show signs of easing, with the annual median unit price falling 1.9 per cent to $445,000.  However, that slight easing doesn’t represent the whole story for Brisbane’s unit and townhouse market.

There are suburbs that have done well this quarter, including Albion (up 5 per cent since December), Bulimba (up 26.8 per cent this quarter), Indooroopilly (up 18.5 per cent), New Farm (up 7.5 per cent), Rochedale (21.1 per cent), Taringa (4.8 per cent) and Toowoong (up 3.2 per cent since December).  [Editor note:  this is likely because of new apartments being sold for the first time, not price increases in existing apartments.]

  

Brisbane LGA suburbs where units have done well over 12 months and five years include:

• ·       Annerley
• ·       Balmoral
• ·       Bridgeman Downs
• ·       Coopers Plains
• ·       Coorparoo
• ·       Darra
• ·       Greenslopes
• ·       Highgate Hill
• ·       Manly
• ·       Manly West
• ·       Mount Gravatt
• ·       Norman Park
• ·       Red Hill
• ·       Richlands
• ·       Rochedale
• ·       Toowong
• ·       Wakerley
• ·       Wynnum

Units are becoming more popular with Queenslanders. CoreLogic has reported that 17 per cent of Queenslanders live in an apartment, just behind New South Wales’ 22 per cent and ahead of Victoria’s 15 per cent.

“The REIQ is confident the long-term future of apartments is secure and particularly in the inner-city where such exciting projects as Queen’s Wharf and the Howard Smith Wharves are adding to the night-time economy of inner Brisbane.  Added to South Bank, Milton’s Caxton Street and the Barracks, the West End, and Eat Street Markets, this is a diverse and vibrant inner-city and the demand for inner-city apartments will continue to grow over time,” Ms Mercorella from REIQ said.

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.

Rive Breakfast Creek

I recently visited the display apartments at Rive, Breakfast Creek.   (It is being advertised as Breakfast Creek, but it is really in Albion.)  I must say that I was a little disappointed.  The finishes inside are almost the same as the same developer did for Fresh Apartments in Toowong a number of years ago -- no improvement in finishes, and so Rive Apartments look so last decade.

The views I saw from the apartments were of flat metal roofs of neighbouring industrial areas, and busy roads.  The common space felt to me like a second tier suburban office park.  The surrounding neighbourhood is not fantastic by any means, unless you want to go to the Breakfast Creek Hotel or Albion Racetrack, which both neighbour this complex.

Prices have dropped (at least from the list price, which I suspect was always an opening gambit) -- a two bedroom has dropped from $610,000 to $570,000; and a three bedroom has dropped from $710,000 to $670,000.  An 88 sqm internal two bedroom is listed for sale at $640,000.

More Affordable and Smaller Apartments

The Courier Mails reports that developers are building apartment buildings with smaller apartments, because that is what is selling today.  Does this mean that there will be a shortage of larger, family sized apartments in Brisbane in the future?

From the Courier Mail:

"Developer FKP recently withdrew a development application from Brisbane City Council for a future tower at its Gasworks development at Newstead.  It was lodged in 2009 and executive director Mark Jewell said it needed to be revised in line with the present market. The tower, known as Parkside Boulevard, will be released in the next three to five years.  Two weeks ago, the same developer released its reworked masterplan for The Mill development at Albion.  A change in market conditions early in 2010 saw it refund deposits for units already sold off the plan and designs changed. It has now launched the first tower and is waiting for sufficient pre-sales before it starts construction.

In Brisbane's CBD, Melbourne-based developer Billbergia unveiled plans to develop the failed Vision site into a 90-storey residential tower with about 800 apartments, a hotel and a 34-storey commercial tower.

Bellise at Fortitude Valley had initially been planned as a 199-unit development, but had received a new approval to reconfigure it to a 228-unit development of smaller product.

Citimark's Angus Johnson said the launch of its 200-unit Rivana development at Hamilton would wait until the market was right.

While Stockwell plans to proceed with the 150-unit stage two and 50-unit stage three of its Riverpoint development at West End, it has not yet advised a time frame.

Sunland has preliminary approval for the 47-storey Carrington in Alice St in the City. Managing director Sahba Abedian said there were conditions attached, which they were working through."

FKP Releases The Hudson at Albion Mill

Yesterday, FKP released the first stage of the Albion Mill development for sale, off the plan.  Apartments are for sale in the building called The Hudson.  There are 134 apartments in this building.  It is located near the Albion railway station.  The building is about 12 storeys, and looks very much like the El Dorado Village development.

Oversupply in Northern Brisbane?

According to an article in the Australian Financial Review yesterday, there is a glut of new apartments for sale in the inner northern suburbs of Brisbane such as Albion and Hamilton.  In the Reed Construction Data report from July 2011, more than 7660 new Brisbane apartments were either in the market or earmarked for launch before December 2012.  Of these, 44% or 3380 apartments were in the inner northern suburbs.

"The glut of stock has come as sales volumes hit new lows in 2010 but the soften has slowed as prices have readjusted and interstate investors see value in Brisbane property. ... Research analyst Lachlan Walker warned that if the majority of projects were not overwhelmingly successful it would put further downward pressure on buyer confidence."

The article had a nice rendering from the Arden Property development at Albion called Eden.  This is said to be a $215 million residential development, with 3 buildings of six storeys each, for a total of 280 apartments.

Oversupply of Apartments in Brisbane, especially Hamilton and Albion

THE number of apartments planned for Brisbane's inner north is the biggest threat to the success of the city's apartment market.

The June quarter report by real estate agent Place Advisory on inner Brisbane's apartment market says new developments planned for this precinct, which includes suburbs such as Bowen Hills through to Hamilton, threaten to create an oversupply in coming months.

Large multi-density communities are being approved almost on a weekly basis, while new mixed-use communities are poised to enter pre-release marketing campaigns before Christmas.

Place Advisory says that if many of these projects are not an overwhelming success, it will add to an already pessimistic local dynamic, ultimately driving away buyers from off-the-plan sales. The success or failure of only a few will affect the wider Brisbane property market in the longer term, it says.

Almost 70 per cent of the unconditional sales during the quarter were priced under $550,000. Only 6 per cent were above $750,000. Total sales were about $136 million, in line with the average total quarterly sales in the past five years.

There were 2144 new residential apartments for sale, or about 27 months' of stock, in inner Brisbane at the end of the financial year.

Of these, 50 per cent were two-bedroom, 33 per cent are one-bedroom apartments, and only 12 per cent three-bedroom configurations.

Place says most of the unconditional sales in the quarter were to interstate or international buyers.

Source: The Australian

Eden Apartments in Albion

Eden Apartments are currently in presales. There are a number of buildings, each about 6 levels heigh. Some of the apartments are a good size.

Price ranges:

• 1 bed (55 sqm, small) - $325,000 to $411,000
• 1 bed (larger) - $411,000 to $518,000
• 2 bed, 2 bath - $621,000 to $823,000

Example

• 1 bed plus study, 85 sqm to 87 sqm - $411,000 to $462,000
• 2 bed, 2 bath 115 sqm - $706,000 to $721,000
• 2 bed, 2 bath 116 sqm to 131 sqm - $686,000 to $696,000

The location is borderline industrial. Seems expensive to me when compared with apartments about a year or two old of similar size.

Eden in Albion

Arden Property from Brookfield is developing Eden at Albion. Prices start at $325,000. Arden also developed Ciana Indooroopilly, which is a good looking low rise development.

The Mill At Albion

The rumor around town is that the Mill at Albion development, by FKP, has been shelved and will not go ahead.

FKP Slow to Start Construction

"FOUR years after Transit Oriented Developments were touted as key to housing thousands of people around transport hubs, building is yet to start on any.

Instead projects designed to create a self-contained living, working and leisure environment in Brisbane have been blocked by red tape, rising headworks charges, financing issues and business woes.

It's not that the concept has no appeal. FKP's The Mill project in the inner northern Brisbane suburb of Albion has had strong pre-sales. But in light of changing market conditions, FKP is still awaiting approval after reconfiguring some plans.

The company has also spent years developing plans for another TOD over the railway station at Milton, in the city's inner west, and has revised plans awaiting approval from the Brisbane City Council.

But without approvals in place yet there is no certainty as to when construction will start."

Courier Mail

Brisbane Apartment Hotspots

"National Property Research managing director Matthew Gross said the area surrounding Sherwood in Brisbane's west will also be a future hot spot.

The combination of continued population growth and an undersupply of residential stock will lead to increased prices in the long-term, Mr Gross said.

Pradella's large-scale Parklands at Sherwood development is also likely to underpin growth, with stage one of the $150 million project nearing completion.

"As new, quality stock hits the market, it is anticipated the median rental figures for apartments in Sherwood will also grow significantly, providing investors with exciting purchasing opportunities," Mr Gross said.

See Brisbane Times

The Mill at Albion

The AFR reported that sales at FKP's The Mill project at Albion were strong, with 120 out of 132 apartments sold, at an average of $6500 a sqm.  For smallish apartments, where most of the two bedroom apartments don't have an external view from the second bedroom, and there is only a galley kitchen, and the overall aspect and views are poor, it seems that FKP has done well here.  I wonder how happy purchasers will be when this project is complete?

Milton Union Station Development

"A 30-storey highrise with 210 units, hotel, and a 10 storey office tower over Milton railway station will be built within the next three years after receiving the greenlight from Brisbane City Council."
See Courier Mail
I wonder if the fumes and smoke output from the brewery will impact those living in the apartments?

The article also mentions the Mill at Albion:
"FKP is also building another transit oriented development at Albion, which was approved by the council in April. Mr Miller said so far 120 of the 140 units averaging about $650,000 each had been sold."

The Mill at Albion Goes on Public Sale

The Mill development by FKP at Albion went on sale today in public release. There had been about 4 weeks of pre-release sales to people who had pre-registered or who were on the FKP database. It was reported that more than 70% of the 143 apartments had sold in pre-release.

The development consists of 4 new buildings -- 2 which are residential, and 2 are commercial. There is also an old flour mill on the site, which will be renovated. One residential building is 10 floors high, and apartments in this building look south to the city or east over Albion. This building has a lap pool on a podium deck. The second building has apartments that mostly look east, but some weird shaped apartments look north. (One line of apartments looks directly into two old silos, which will remain on site.) People living in the second building have access to the pool in the first building, but will have to cross a road to get to that building.

Most of the apartments have 2 bedrooms and 2 bathrooms. All the one bedroom apartments are reported to be sold. There are also some three bedroom apartments.

Most of the 2 bedroom apartments range in size from 85 sqm to about 92 sqm internal, plus a balcony. The pricing for 2 bedroom range from $660,000 to mid $700,000s.

The site is located on or adjacent to the Albion railway station.

I would be concerned that the views from the apartments could be built out. The current aspect is not attractive -- the views are of or over warehouses, a pub car park and an adult shop. The area is mostly light industrial.

The most common two bedroom design is called a 2F. It is 92 sqm internal, with a 15 sqm balcony. It is a good size overall, and the rooms all are a good size too. The front door of the apartment opens into an open "mud room". There are glass sliding doors from the "mud room" to the dining room. There is no separate kitchen -- a wall kitchen is located on the side of the dining room. The second bedroom is an "internal" room -- it has a high window onto the hallway and a window into a "mud room". The apartment has showers but no bath. I was offered one of these apartments, on a low floor looking east, for $685,000 (or about $6400 a sqm).

The Mill

News About Union, Albion and Northbank

Ten News Video

FKP's Albion Development

FKP has an interesting project planned for Albion, called the Albion Mill. See http://www.themillalbion.com.au/ and
http://skyscraperlife.com/showthread.php?t=7627