How Many Apartments for Sale in Brisbane?

There has been some press recently about the number of apartments for sale in Queensland, and the slow sales rate. This may be the case for the Gold Coast, and for overpriced off-the-plan developments. But if you look at the quality buildings in Brisbane, there are very few apartments for sale.

For example:

• Quay West: 4 apartments for sale (two 2 beds; two 1 beds).
• Admiralty Quays: two 2 beds
• Admiralty Towers: one 2 bed at rear
• Admiralty Two: one 2 bed; one three bed
• Arbour on Grey: 2 apartments for sale (one 2 bed; one 3 bed).
• Saville SouthBank: zero

Across these buildings, that is less than 2% of the total apartments in these buildings for sale.

Some buildings have a large number of apartments for sale: Skyline, Aurora, Macrossan, & Riparian all have a number of apartments for sale. Strangely, The Grosvenor, which usually has no apartments for sale, has about 3 for sale at present.

So there may be an oversupply in some areas and for some buildings, but for the quality buildings, there are not that many available to purchase, particularly below the $900,000 price point. And the flooding of Brisbane does not appear to have impacted pricing of these apartments at all.

Flood Building Update From Readers

212 Margaret Street still out of power, energex is talking about getting in a generator. Plus the lift shaft seems to be damaged so no go on the lifts either at the moment! No one can tell me when it will be up and running but it doesn't look good to be honest - apparently there was a lot of damage downstairs and a great deal of debris.

Riverplace Apartments maintained electrical power during the floods, so the basement carpark sustained only a few inches of water and no forced evacuation.

Admiralty Towers One - building evacuation still in force; at least 48 hours to occupancy. Lifts not working.

All services to Admiralty Quays have now been restored including all four levels of car parking in the basement.

Admiralty Two: There is still some water in the high rise lift well, and Kone cannot bring lifts into service until this water is completely drained. Owners who live in the high rise may use the low rise lifts to go to level 21, then use the fire escape to access their level. Our security guard will be on duty tonight. He has a fob for high rise owners to access level 21. Priority will be given to get at least one high rise lift operational tomorrow (Wednesday).

Water's Edge: The Developer has been working with us to clear the basements and this has nearly been completed. The cleanup in the basement should begin Tuesday 18/1/11. There is damage to the electrical boards that were located in the basement, however the repairs are expected to begin as soon as possible.

Emporium Valley: Operating normally with exception of Toulouse North Tower where power is yet to be re-instated and lift access restored. We are hopeful power will be back by Wednesday this week.

Oaks Festival Towers: Still pumping water from basement on Wednesday afternoon.

KoKo West End: Basement flooded and building evacuated

Left Bank, West End: Basement badly flooded

120 Mary Street: "Unfortunately due to flood damage the Quest River Park Central is currently closed. It is hoped to have the building back open by mid next week; however no date can be provided at this point. More information to be posted as it comes to us. "

Private property developer Mark Stockwell said the group's Riverpoint apartments at West End had water in the basement. The floodwaters did not reach the residential floors. "The water has now all been pumped out and there was some damage to the electricals, which is now being fixed."

Brisbane Floods

With the flood water going down, the clean up is starting. Many Brisbane apartment buildings were impacted by the floods -- basement carparks full of water and mud; no electricity; residents evacuated.

Some of the buildings that have significant water in their basements include:

• Admiralty Towers
• Admiralty Two
• Admiralty Quays "we only had minor flooding in the lower level of the basement (about 50cm deep)"
• Riverplace
• Riparian (access tunnel to carparks - carparks are above ground level)
• Felix
• 212 Margaret
• Festival Towers
• River City
• Vue at Milton
• Water's Edge
• Flow
• SL8
• Parklands Sherwood
• Fresh Toowong
• Encore Toowong
• Arbour on Grey at South Bank
• Tennyson Reach
• Most apartments on the river at St Lucia
• the list goes on

Pradella writes about Parklands at Sherwood: "Sadly this site has experienced quite a lot of damage. The Outlook – which are the entertainment facilities has been completely submerged by water. The car park under Jacaranda and Brookline is also completely submerged. Whilst floodwaters did not reach the interior of the apartment buildings, it did however breach a number of houses and townhouses. The entire complex was evacuated late on Wednesday afternoon. Power has been cut and access to the property restricted."

and about Waters Edge:

"There has been significant damage to the pool and the grounds however the water from the river has NOT entered the building. The car park under the building has flooded, and all residents evacuated. Power has been cut."

Admiralty Towers has it status (current evacuated) on its website.

I am amazed that the Council allows buildings to be built with basements that flood, forcing loss of power and residents to be evacuated. See also this article.

I am not sure how the floods will impact property prices in Queensland. After the 1974 floods, the prices of impacted houses decreased for a period. There will be a shortage of rental accommodation, as many people are looking for places to live. Foreign press is reporting on its nationals being evacuated -- see for example, this article from Singapore and Malaysia -- and QUT and UQ were flooded, which will not be good news for those trying to attract foreign students to Brisbane.

On the positive side, it could have been much worse. Only one person died in Brisbane, and the flood levels were lower than initially expected.

Differences in Apartments

A recent Adjudicator's decision regarding Admiralty Towers II highlights a factor that buyers and valuers sometimes overlook -- that is, some apartments have different rights and facilities than other apartments in the same building. In Admiralty Towers II, there are two swimming pools -- a lower pool and a pool on the top floor. Each pool also has a gym. The top floor pool also has a roof sundeck.

The bylaws of the building state that the owners of lots 126 to 193 may use both pools and gyms. The owners of lots 1 to 125 may only use the pool and gym on the lower floor, and cannot use the top floor pool, gym or sundeck.

A resident challenged this bylaw. The challenge failed. These kind of bylaws are not unfair or unreasonable. See Ref 0915-2010 issued 23 December 2010.

Thus, the value of an apartment on a higher floor should be more than a similar an apartment on a lower floor -- not just because of the views, but because the apartment has access to more facilities.

The moral of the story: when buying or renting, check to see if any apartments have access to exclusive use facilities. Make sure you are doing a like for like comparison when looking at recent sales data.

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

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.

Annual Rate of Return - Felix and Admiralty Two

Lot	P-Price	P-Date	Sell Price	Sell Date	A RoR
Admiralty Two
20	$445,000	13/09/04	$725,000	11/05/09	11.03%
25	$369,000	24/02/94	$850,000	11/02/10	5.36%
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%
Felix
63	$415,000	20/12/05	$445,000	24/09/09	1.87%
82	$305,000	10/08/01	$480,000	30/12/09	5.55%
137	$355,000	4/06/04	$494,000	14/12/09	6.16%
161	$214,900	16/05/03	$325,000	20/11/09	6.55%
195	$280,000	13/08/01	$428,000	7/09/09	5.40%
256	$522,000	6/08/08	$530,000	3/12/09	1.15%
258	$248,950	30/08/01	$351,000	23/09/09	4.35%
291	$264,450	28/04/04	$358,000	24/02/10	5.33%
302	$746,000	13/09/01	$500,000	23/12/09	-4.72%
371	$630,000	4/08/05	$670,000	17/02/10	1.36%

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.

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%