Example Rents in Brisbane City

New Buildings - Furnished

1 bed, no car - M on Mary - $500 per week
2 bed, 2 bath, 1 car - Evolution - $900 per week
2 bed, 2 bath, 1 car - Skyline - $1,300 per week
3 bed, 2 bath, 1 car - Skyline - $900 per week
3 bed, 2 bath, 3 cars - Riparian - $2200 per week

Other Buildings - Furnished

2 bed, 2 bath, 1 car - Admiralty Towers - $680 per week
2 bed, 2 bath, 1 car - Saville South Bank - $740 per week

New Buildings - Unfurnished

2 bed, 1 bath, 1 car - Evolution - $650 per week
2 bed, 2 bath, no car - Aurora - $660 per week
3 bed, 2 bath, 2 car - Skyline - $1500 per week
3 bed, 2 bath, 3 car - Riparian - $1850 per week

Other Buildings - Unfurnished

2 bed, 2 bath, 1 car - Admiralty Two - $580 per week
2 bed, 3 bath, 1 car - Metro 21 - $575 per week

Meriton Tower - Back to the Drawing Board

Meriton told to resubmit plans for 'appalling' skyscraper
Georgina Robinson | May 7, 2008

Property developer Meriton has been unceremoniously told to go back to the drawing board with plans to build an "appalling-looking" 76-storey skyscraper in the Brisbane CBD.

Liberal and Labor politicians used a meeting of Brisbane City Council's urban planning committee to roundly condemn the proposed Adelaide Street tower for its potential traffic impacts and "appalling design". Lord Mayor Campbell Newman also made an unusual visit to the meeting to declare his opposition to the 403-unit project in its current form.

The proposed site is at the intersection of Adelaide and Macrossan Streets in the so-called Petrie Bight, one of Brisbane's most densely populated precincts. Its 400-plus units would be a mixture of serviced and residential apartments, set atop a podium of commercial space and 10 levels of carparking.

Central ward councillor David Hinchliffe said many locals were worried another influx of apartment dwellers would choke the tiny streets around the area, which is already home to Skyline and the Macrossan building, which is under construction. But Meriton planning manager Walter Gordon said the company had been working closely with council planners for 12 months to sort out the traffic issues.

Council planning chair Amanda Cooper said the committee was also "underwhelmed" with the tower's design. "We want to see something we're proud of, not something we're trying to disguise with other things around it," Cr Cooper said.

And Cr Newman asked his comments be noted in the meeting minutes. "We've been talking about excellence in design for years here," he said. "This does nothing, I don't see any merit in that whatsoever." A disappointed Mr Gordon said he was unaware such objections existed. "I'm a bit disappointed that having worked so closely with council and we come up to this stage to hear nobody likes it," he said. The committee instructed Meriton and council planning officers to do more work on traffic management and design.

Skyline's River Vista

This is a photo of a 2 bedroom "I type" apartment in Skyline. This apartment is 87 sqm internal, and was sold as having Brisbane River vistas. From the photo, you can see that it has a great view of Admiralty Towers. On the right, you can see the door to the second bedroom. It is a strange shaped apartment, with bad karma. The living room (seen in the photo) is not wide enough, and the dining area is a triangle shaped alcove. The kitchen faces a blank wall.

Auction - Ray White Spectacular

Auction - 20 April 2008

112 properties listed for sale, including 26 vacant lots on Russell Island and 6 rural properties.
10 out of 80 residentials sold prior to auction
18 out of 70 sold at auction
21 sold within a week after auction.

According to Ray White, the day proved a good "educational process. .. Buyers are more discerning. ... some vendors are not yet in tune with the slight change in the market."

There were about 10 apartments that went to auction, including one in Skyline and some in Aurora and Festival.

Skyline Falls

Skyline apartment, which is supposedly an exclusive residential building, is doing short tern and vacation rentals.

See Check-in.com.au or wotif.com

Not very good if you spend a million dollars on your apartment and you have the football team staying next door.

And for "hotel" guests, take care. This is not a hotel. The "reception" is open limited hours. Don't try to check in at reception Saturday afternoon or Sunday, and don't try to speak with anyone in management after hours either if something goes wrong in your apartment.

Brisbane Apartment Pipeline

As far as I can tell, these are off-the-plan apartment sales that will be launched this year in Brisbane (larger apartment developments only). I have put in bold those that are in the downtown area.

1. Trilogy Hotel - 192 apartments
   
2. Trilogy Skyhome Apartments - 109 apartments
   
3. Westin Residences (Empire Square) - 104 apartments
   
4. Waters Edge at West End - 220 apartments in the first 2 buildings to be released
   
5. Union at Milton - 213 residential apartments and 127 hotel rooms
   
6. French Quarter - about 70 apartments and 150 hotel rooms
7. Hamilton Harbour - about 250 apartments
   
8. Meriton Tower - 200 serviced apartments plus 200 residential apartments
9. The Mill at Albion
10. Waterfront Newstead - 631 apartments
    

Current off-the-plan buildings being marketed and under construction

1. Vision (400 apartments)
   
2. Iceworks at Paddington (47 apartments)
   
3. Parklands at Sherwood (82 apartments for sale now; 211 apartments planned in total)
   
4. Tennyson Reach (393 apartments)
   
5. SL8 (112 apartments)
   
6. Ciana Indooroopilly (132 apartments)
7. Portside Hamilton
8. Riverpoint West End (280 apartments)
   
9. The Macrossan (42 apartments)
   
10. SW1 (57 apartments)
11. Fresh Toowong (92 apartments)
    

Current completed buildings with unsold apartments

1. Skyline
2. M on Mary
3. Evolution
4. Koko
5. Tempo
6. Flow
7. Vue
8. Aurora Skyhomes
9. Pinnacle Parklands

From recent Collier's reports: "With three new projects bringing only 100 new units to the market in total, we now have our lowest unit supply since March 2004. Based on this quarter’s demand level of 104 units per month, we currently have enough stock in the market to last until May 2008."
"As a result the Dec 07 quarter has closed with 754 units available for sale, translating to 8.9 months of supply based on current demand levels. This supply is not evenly spread however, with the north precinct left with only 2.9 months of supply and the west with only 3.2 months, meaning if current demand levels remain constant both of these precincts will be completely sold out by the end of April 2008, unless new projects are released within these areas."
"Rental unit vacancy rate for Inner Brisbane sits at 1.3%, showing a considerably tighter rental market than the remainder of Brisbane which shows a rental vacancy rate of 2.2%."
See, e..g., http://www.colliersresidential.com/files/research/brisunitreport_dec07.pdf

Skyline - How much is unsold?

From Ariadne's report to the ASX dated 27 February 2008:

The 192 unit Skyline project was completed in October 2007. As at 31 December 2007, the project was 65% settled. Currently, 24 units remain to be sold.

Ariadne expects a degree of volatility in the SEQ property market over the next 12 months.

(On 13 November 2007, Ariadne reported that the Skyline project was 80% sold and that settlement was expected on the week starting 26 November 2007.)

Why, if it was 80% sold as at November, was it only 65% settled as at the end of December? Did 15% of the sales fail to settle? Or are these insider sales with delayed settlement?

What will 2008 have in store for the Brisbane apartment market?

First, how did the Brisbane apartment market do in 2007?

The results were mixed.

It is hard to get reliable information about "the state of the market" when looking at inner city apartments in Brisbane. Agents only seem to remember the last two weeks -- if they made some good sales in the past 2 weeks, then the market is booming; if they didn't get new listings or a contract collapsed, then the market is heading towards a bust.

Information providers, such as RP Data and PRDColliers, have good information, and this information is often used by the media to make general conclusions. However, general conclusions are often not useful when considering a particular apartment building or apartment.

Capital Gains

Some apartment buildings did very well, and others did not. Overall, a good building had at least a 10% capital gain in 2007.

The buildings that had good capital gains include:

• Riverplace, where the average 2 bedroom apartment increased from about $500,000 to over $600,000.
• Admiralty Two, where 2 bedroom apartments increased from about $650,000 to $720,000 (with one now listed at over $800,000).
• Quay West, with a 2 bedroom apartment selling to a senior Devine employee at auction for over $800,000.
• Metro 21, with high floor 2 bedroom apartments increasing from less than $460,000 to more than $500,000.
• Arbour on Grey, with 2 bedroom apartments now in the low $700,000 range.

Buildings that have been disappointments include:

• Charlotte Towers and Festival Towers - with Oaks taking over management. Many developer apartments still remain for sale in Charlotte Towers. Investors who purchased off the plan have had a hard time getting good prices on resale, with over 800 pokey poor quality student apartments in these two buildings, where the views will likely be lost as buildings grow around them and there will always be competition amongst sellers.
• Casino Towers, also taken over by Oaks, and with North Bank plans taking out the river views.
• Aurora, a poor quality ghetto building.
• Vue, at Milton, with apartments that sold off the plan in the mid $700,000s reselling at auction in the mid $500,000s.
• Koko, that still has not sold out, and the complex feels like a ghost town. The developer overpromised and under delivered.

Rents

Rents increased, and vacancy rates dropped in 2007. But the overall rental market is not as good as many newspaper articles suggest. The poorer quality buildings are full of students, often with 6 people living in a 2 bedroom apartment, on a rent subsidised by the developer who promised the first owner a rental guarantee. Many apartments are occupied by corporate renters (such as Accenture, engineers working on the tunnel, etc) who are willing to pay high prices for new furnished apartments; but this demand will not continue indefinitely. Some buildings, such as those managed by Oaks, are turning apartments into hotel rooms, thus reducing supply. Although December is not the best month to find tenants, there are many empty apartments in Brisbane awaiting tenants. Skyline and Koko, for example, have many empty apartments.

Although rents increased in 2007, the rate of increase slowed towards the end of the year. It is now hard to find a good unfurnished two bedroom apartment for rent in the inner city for less than $550.

Predictions for 2008

Quality inner city apartments in Brisbane will do well in 2008. Capital growth will continue, and vacancy rates will remain low. Reasons for this include:

▪ Brisbane population will continue to increase.
▪ International students still regard Brisbane as a desirable location.
▪ There are many infrastructure projects in Brisbane, requiring professional staff to work in Brisbane.
▪ Traffic will get worse, and many young singles and families will want to live in quality accommodation close to work and other facilities.
▪ It is becoming more acceptable and desirable to live in an apartment in Brisbane.
▪ The U.S. subprime problems will have little long term impact in Brisbane.
▪ There will be few new buildings entering the market in the next two years. M on Mary and Evolution, both second tier buildings, will be complete in 2008. That's about it. There are only six buildings listed on realestate.com.au in the developers section for the CBD, and four of these are completed buildings (Vue, Trilogy, Pinnacle, Skyline, The Hub, Evolution). It does not look like any new buildings will be ready in 2009. There will be new buildings for which marketing will commence in 2008, but these buildings will not be ready until at least 2010.

So here are some predictions for 2008:

• The price of a good quality 2 bedroom 2 bathroom apartment in Brisbane, with views, will be at least $800,000.
• The price of an average quality 2 bedroom 2 bathroom apartment in Brisbane will reach $650,000.
• By the end of 2008, it will be hard to find any modern inner city apartment in Brisbane in a good location for less than $600,000.
• New off-the-plan 2 bedroom apartments (for buildings where marketing commences in 2008) will start at $800,000.
• Average rent for an unfurnished 2 bedroom apartment will jump midyear to $620 per week.
• There will be more buyers than sellers.
• There will be more action in the inner suburbs than in the city. Prices for quality apartments in areas such as Indooroopilly and Toowong (where there is a train station and regional shopping, close to education facilities) will boom. By the end on 2008, it will be hard to find a good quality 2 bedroom apartment in these areas for less than $600,000.
• Noosa and Mooloolaba will rise again, as people looking in Brisbane for investments will see good value in the northern beaches, particularly beachfront apartments.
• 2009 will be better than 2008.

If you find any of these predictions hard to believe, for some buildings they are already true. For example, today:

• Small Off-the-plan 2 bedroom apartments in Brisbane, in Evolution, at 75 sqm, are selling for over $650,000.
• Two bedroom apartments are selling in Quay West, Arbour on Grey, Admiralty One and Admiralty Two for more than $700,000.
• Trilogy, in Spring Hill, has two bedroom apartments (less than 80 sqm, but with views) listed at more than $600,000. [However, a number of contracts have fallen through, as the valuations have come back $40,000 or so less than contract price.)
• New two bedroom apartments with river views in West End and Milton (e.g. in Flow and in Coronation Residences), which are not prime locations, are selling for more than $900,000.
• Off-the-plan apartments (two bedrooms, at least 85 sqm) are selling in quality developments in Indooroopilly, Toowong and Sherwood today for well more than $550,000.
• People have signed contracts for 2 bedroom apartments in Vision (e.g., level 35, 120 sqm) for more than $1,000,000. Settlement, if this building ever gets off the ground, will not be until 2011.
• The price range for a large 2 bedroom apartment in Mirvac's Tennyson Reach is $900,000 to $1,100,000. Settlement in 2010.
• Off-the-plan 2 bedroom apartments in Soul on the Gold Coast are, at a minimum, $1,800,000. Settlement not at least until 2011.

So I will not be selling in 2008.

Skyline's views to further diminish?

Before you buy or rent in Skyline, read the Skyline posts below. Also, have a look at this area plan, available on the Internet. You can see that Skyline could easily become boxed in, with limited views in most directions. (Similar comments for Macrossan Apartments.)

In addition, the Australian Financial Review reported this week that Meriton lodged plans to build a 70 storey tower on the corner of Boundary and Adelaide Streets, with 200 serviced apartments (not to be sold), 200 residential apartments and 3 floors of offices. This will impact Macrossan and Skyline.

Skyline

Skyline apartments in Brisbane are nearing completion. Settlement is planned for late October or November.

Colliers PRD reports that as at the end of June 2007 quarter, 33 of the 192 apartments remain for sale.

I was told that the developer had a number of 3 bedroom apartments available for sale. All 2 bedroom apartments have been sold by the developer.

I was also told that many people purchased off the plan with the intent of reselling around settlement.

I had a tour through the building, and was mostly disappointed. I was glad that I didn't buy any apartments.

Some comments:

• J type - 78 sqm internal, 98 sqm total. This was sold as a two bedroom, but the second bedroom is fully internal, and has "windows" looking into the kitchen. It is really a one bed plus study. It has river views between Admiralty Quays and Admiralty One. It was sold off the plan in the high $500K. There have been resales at less than $600,000, and there are many of these apartments on the market for resale. Overall, these are small, darkish apartments, and in my opinion are not very nice. My opinion is that these apartments are not worth more than $500,000.
  
• I type - 87 sqm internal, 102 sqm total. Two bed, two baths, no walk-in-robe. This apartment is a triangle in shape. You enter into the kitchen, which has a strange shape, and the island bench looks at a blank wall. The kitchen is around a corner, so to speak, and is dark. The dining area is large, and the living room has limited views between Admiralty Quays and Admiralty One. Both bedrooms are at the front, with views. This could have been a good apartment, apart from the overall shape and kitchen -- which does not work. There are a number of these apartments for resale between $650,000 and $680,000. My opinion is that these apartments are not worth more than $600,000.
• G2 type - 117 sqm internal, 142 sqm in total. Three bed, two baths. This apartment has a large feeling. There is a river view from the balcony and sideways from the living room. The living/dining/kitchen have a really nice vista down Howard Street to the city. The bedrooms are at the back of the building (Arch Lane). For the moment, they have a western vista across the northern end of the downtown. This view will soon disappear with Macrossan Apartments are built right next door, probably turning these nice apartments into dark apartments. The main bedroom has an open bathroom, so from the bed you have a view of two vanity basins. The built in wardrobes are in the bathroom. So what could have been a nice apartment has a strange main bedroom/ensuite design and will soon the bedrooms will be built out by Macrossan Apartments. The developer has a number of these available from $720,000 to $885,000, and is prepare to discount them to clear. There are resales starting at $690,000. On a price per sqm basis, these are good value. But long term, it will not be good. So I would value these at $650,000.
• K type - 101 sqm internal, 120 sqm in total. This is a small three bedroom at the front on the north-eastern side. When you walk in the door, and from the back of the apartment -- wow! A great river view. But as you move forward, you notice that this apartment is really behind Admiralty Quays. The main bedroom, at the front, basically looks into the back of Admiralty Quays. The living room is set up so that from your couch, when looking at the TV, your view out the window is of Admiralty Quays and not the river. The main ensuite has the same flaws as the G2 type. The second and third bedrooms look at the back of Devine's River Place. This is a small 3 bedroom, that has little privacy and a bad feeling due to Admiralty Quays. The developer has stock left at $835,000 to $855,000. There are resales available for $800,000 and less. My view is that these apartments are worth about $750,000.
• On the high floors are some magnificent three beds plus media room. They combine, in effect, the I and J types. All three bedrooms are at the front, and they are high enough to look over the Admiralty buildings. These are magnificent apartments. Resales at about level 30 around $1,500,000.
  

The onsite rental people give this information regarding rentals:

1BRM
Unfurnished: $360.00
Furnished: $420.00

2BMR
Unfurnished: $550.00
Furnished: $650.00

3BMR
Unfurnished: $750.00
Furnished: $950.00

3BMR+MEDIA
Unfurnished: $950.00
Furnished: $1100.00

Other comments. The pool is very small, and closed in by Admiralty Quays and Skyline. The tennis court looks fine, but has no lights and cannot be used at night -- and so will not be useful for most city workers. The quality of finishes is good, but becoming standard. Nothing that you would not expect from a new city apartment building. There will be two retail stores on the ground floor.

Overall, my opinion is that this is a B grade location. It will be no different to Aurora Towers -- river views, one block back. It is not a prime position, and is surrounded on one side by buildings and soon will be surrounded on the other side. There appear to be many speculators who have bought of the plan. It suspect that they will get burnt. Owner-occupiers will be disappointed with the floor plans, and anyone below level 30 will be disappointed with the views. It is, in my opinion, misleading to call this building riverfront, and to say that it is "the only Brisbane high-rise development to boast river vistas from every single apartment" is clearly misleading, as the H and H1 apartments on the lower floors have only a tiny glimpse of the river between River Place and its car park.