Recent Auctions

• 2602/108 Albert St (Festival Towers) - 2 bedrooms - one of the better apartments in the building - withdrawn from auction and now listed at "over $500,000"
• 110/540 Queen Street (Willahra Tower) - studio - failed to sell - highest bid was a vendor's bid of $175,000

I have attended a few open houses on recent weekends, for 2 bedroom apartments in the middle ring suburbs, selling at less than $500,000. I was the only person who attended each open house. Not that many buyers around.

Recent Sales

Some recent Brisbane apartment sales and auction results:

• Quay West, apartment 1506, 2 bedroom, sold last week, reportedly very close to listing price of $775,000
• Quay West, apartment 1505, 1 bedroom, sold last week, listing price $465,000
• Arbour on Grey, apartment 2302, 2 bedrooms, sold at auction yesterday for $611,000 according to APM
• Parklands Pinnacle, apartment 6017, 3 bedrooms, failed to sell at auction, sold after for $1.3M

Properties Advertised For Sale

From an RP Data newsletter, relating to Australian property advertised as for sale:

"The number of new properties advertised for sale increased by 2.8% last week. The number of newly advertised properties for sale is currently 20.5% above the 12 month average and 23.3% higher than it was at the same time last year. The total number of properties advertised for sale increased by 1.7% last week. Total advertisements are 13.1% higher than the 12 month average and are 23.6% higher than at the same time last year. With so many properties available for sale and few active buyers, vendors are going to have to offer competitive pricing if they wish to sell."

See Chart, that shows $41 billion of property for sale in Queensland. There are more properties listed for sale in Qld than in any other State.

Gold Coast Auctions

It has been reported that settlements for the $700 million Oracle Broadbeach apartment project on the Gold Coast are likely to be delayed by the Queensland floods.

This is because Brisbane lawyers working on the contracts are unable to return to their flooded city offices, according to the receiver for the project. ... Since October, about 180 of those presales had settled after values of Gold Coast apartments typically fell by 30 per cent since the global financial crisis.

Source: The Australian

It will be interesting to see the auction results for these apartments:

• Q1, Apt 5307
• Soul, Apt 3805
• Soul, 2805
• Circle On Cavill, Penthouse

Some of the Oracle apartments for sale:

• Apt 2405, $2.4M (or over $9K a sqm, which is outrageous!)
• Apt 2605, 2 bedrooms, $1.5M (note the 2006 off-the-plan price for this apartment was $1,320,000)
• Apt 1404, $795,000
• Apt 1505, $680,000
• Apt 1907, 2 bedrooms
• Apt 3401, 3 bedrooms, $1.5M
• Apt 3801, 3 bedrooms, $2.5M (or over $13K a sqm -- the vendor is on another planet!)
• Two bedroom at rear, $1.6M
• Two bedroom, $1.3M
• Two bedroom 27th floor, tower one
• One bedroom on 6th floor, just over $600,000
• One bedroom, tower 2 $800,000
• List of resales

Note that there are two towers: Tower 1 is 50 storey's, comprising 274 luxury apartments (faces the ocean with ocean views) whilst Tower 2 is 40 Storeys, and comprises 241 apartments (faces North East (behind Tower One)).

See also RealEstate Buzz

Ray White Market Update

I received a Ray White CBD Residential Market Update this week. Some extracts:

• "we also have 37% more properties for sale so buyers have more choice"
• "The inner city unit market continues to be popular..."
• "While there is an increase in the number of listings, there is no evidence of an oversupply of units in the marketplace."
• "Projects that are going ahead are price targeted toward the lower end of the market."
• "there has been an abundance of rental properties available so far this year in the Inner City causing the vacancy factor to over around 4%" (compared to Sydney and Melbourne at 1.2%)
• "Another factor is the rapid fall off of overseas students coming to Brisbane to study."

Ray White also reports that 91% of the properties that it auctioned this year sold, with an average of 61 days to sell. This compares with private treaty sales being 50% sold within 80 days. Doesn't sound like auctions are a fast way to sell. And 80 days time on market for private treaty is very bad -- and half of the properties listed for private treaty don't sell!! Not a good market for sellers.

Which way is the market heading in Brisbane?

RP Data reports low auction clearance results for Brisbane for last week:

APM reports the following top sales for Brisbane City apartments (in the 4000 post code) -- which may not be accurate:

More Losses

Mirvac's Tennyson Reach: Apt 3302 is listed for sale at "half price". This is a three bedroom riverfront apartment (on a low floor). Approximately 150sqm. Listed for sale for $865,000 (a huge loss for the current owner).

Riparian, Apt 4504 at 71 Eagle Street. Sold by Mikki Finlay for $1,286,000 at auction last week. 2 bed, 2 bath, 2 car, 186 sqm. Last sold in March 2006 for $1,575,000. Good job Mikki, you only sold at a capital lost of $289,000 plus stamp duty. Hope you didn't charge commission?! Maybe sellers would do better listing on eBay?

Buyer Confidence Low

Extracts from a story in today's Courier Mail:

HOMEBUYER confidence has taken a dive in southeast Queensland with predictions of more pain to come.

While auction clearance rates have been on the way down for months, auctioneers are now reporting a drop in those even registering to bid.

Auctioneer Jason Andrew said only half the auctions he held last week attracted bidder registrations – significantly down on the highs of 80 per cent over the previous two weeks.

"Sixty one per cent of the properties we auctioned did not attract a genuine bid," he said.

" One property in particular sold for almost $300,000 under the vendor's original reserve."

See Full Story

Felix Auction

It is always good to see what happens at normal auctions. An apartment in Felix, 307/26 Felix Street, went to auction today. See listing. It is a 2 bedroom, 2 bathroom apartment on a higher floor, with decent views (some river glimpses) but a little lack of privacy due to Waterfront Place, and the possibility of being built out if the building next door or behind is developed. 78 sqm internal floor area, 91 sqm total.

There were 3 registered bidders. The highest bid was $482,000. The apartment is now listed at $525,000. This gives a range of between $5,300 and $5,700 a sqm -- which is good to keep in mind if you are buying an apartment off the plan.

Spring Hill - Trilogy Apartments

There were 3 auctions last weekend of 2 bedroom apartments in the Trilogy complex at Spring Hill (namely, apartments 226, 330 and 334)

This complex was heavily marketed (at high prices) by Which Property? who was also related to the developer.

The Courier Mail reported that apartments were passed in for $400,000 and $420,000 (about $150,000 less than the prices that the developer was seeking about 2 years ago).

These are relatively decent apartments, some with good views, and a large pool area. The apartments are not large (about 75 sqm internal) but are well designed. Not far from the downtown.

Listing at $490,000 (Apt 334, 51 Hope Street)

Listing at $490,000 (Apt 226)

Listing at $550,000 (Apt 330)

Listing at $680,000 (Apt 354)

A 2 bed, 2 bath sold in 2009 for $540,000.

A furnished 2 bedroom is available for rent for $650 a week. See also here.

Real Estate Agent Tricks

Have you heard about these two tricks from real estate agents?

One is listing a property for sale by forthcoming auction, but never actually scheduling the auction. There is no list price, and the agent tells prospective purchasers do get in quick before the vendor has to pay for advertising, and that once the auction campaign commences, the vendor will not accept conditional offers subject to finance or building inspection.

The second trick is to set a high reserve at the auction. The agent then takes telephone bids, but in fact, the person bidding via telephone is a friend or co-employee. Because the agent knows the reserve, the fake telephone bidder comes in close to but just below the reserve. This bids the price up, and then when the property doesn't sell at auction (as it usually will not), the agent then lists the property at the reserve price and says that there was a bidder just below the reserve (which, of course is not true).

Apartment Auctions in Brisbane

Newspaper reports and auction clearance statistics show that less than half the properties that are for sale by auction do not sell at auction. In fact, probably only 1 in 3 sell at or immediately after auction. For apartments, my guess is that the sales rate for sellers is even worse. The reason is that it easier to value an apartment, by looking at similar sales in the same and nearby buildings. So a purchaser is less likely to overbid (and overpay) for an apartment at auction, and thus less likely to reach the seller's reserve price.

Auctions Today

According to APM, there were 16 auctions in Brisbane today, and only one property was sold. What does this tell you? Ray White seems to think that the market is good for sellers:

"Ray White CBD residential principal Brendan Tutt said demand for property in and around the city had remained strong and there was a shortage of supply.

“The best time to sell is when demand exceeds supply,” he said. “And that’s what the situation is at the moment.”"

See Ray White website

Recent Sales

• MacArthur Chambers - 2 beds, 2 bath, Apt 609, 229 Queen Street, sold for $790,000 and now listed for rent at $730 per week furnished.
• Aurora Towers - 2 beds, 1 bath, Apt 365, 420 Queen Street, sold for $490,500
• River Park Central, 2 bed, 2 bath, Apt 1102, 120 Mary Street, sold for $420,000

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

Roma Street Parklands Auction Result

A three bedroom apartment in the Pradella Roma Street Parklands development went to auction today. A deceased estate. The address is 7110/7 Parkland Boulevard. This apartment is an end apartment, on the southern/city end of the building, with the side view looking into the Pinnacle building. 119sqm internal, with a long skinny living room at the front, and three bedrooms on the back (on the railway side), plus two largish balconies. Sold today at auction for $750,000. The total area (including balcony) is 155sqm, so this sold for $4,840 a sqm. This is significantly less than the price per sqm of many off the plan developments currently being marketed.

Auction Results

This is supposed to be selling season. APM reports that only 8 properties in Brisbane sold at auction this Saturday. No units were reported as being sold at auction. Although auctions are not as common in Brisbane as in Melbourne, and many agents don't report to APM, this is not a promising sign.

Gold Coast - Colliers Newsletter

"Sellers who have been holding on for the last 2 years, not needing to sell, are now making the decision to sell.

There is good buyer interest however some are still looking to find the bargains, which are almost gone from the market as the competition from buyers increases.

Recent auction results confirm buyers are active in the market, but their offers are sometimes falling short of the owners expectations. The real test for the properties that have passed in at auction is to see if they sell within the next 2 weeks. These sales will occur because buyers realise that they need to pay a little more than their first offer to secure the property or sellers realise the market will only support a certain price level."

This sounds to me like prices are going down.

Low Clearance Rate a Mega Auction on Gold Coast

137 properties were originally listed for sale at the large Ray White Gold Coast auction held on Sunday. 65 sold prior to or on auction day. That is a 47% clearance rate after at least a 4 week campaign. Not very good. And it seems that pricing achieved was not great, despite the big lead up publicity. In my view, auctioning non-unique apartments is not a smart tactic. Two apartments in Circle on Cavill sold for less than $400,000 each, furnished.

As reported in the Gold Coast Bulletin:

"But not everyone was optimistic about the property market, with two vendors at the auction, who wished to remain anonymous, claiming they fell short by about $130,000 over three Surfers Paradise units they had to sell due to family circumstances.

"I don't think the confidence is in the market," said the vendor."

Tennyson Reach Auction Results

Mirvac auctioned 9 apartments at Tennyson Reach last weekend. There are more than 15 purchasers of off-the-plan apartments at Tennyson Reach who failed to settle. Mirvac auctioned off nine apartments where there was no legal dispute between the Mirvac customer and Mirvac. (S0 there will be more sales of failed settlements coming.) The auctions were all three bedroom apartments with river or mangrove views. For all these apartments, they sold off-the-plan for more than $1M.

At the auction, there was only one apartment where bidding was more than $1M. This was apartment 3311 (a 6th floor end apartment, 234 sqm including balcony.)

For all other apartments, the majority of bids were in the $800K and $900K range. Most of the apartments did not reach the reserve, and were passed in. Some sold after auction, and at least 5 were still for sale when I looked recently. The apartments that did not sell at auction or immediately after were:

www.johnstondixon.com/3111k
www.johnstondixon.com/3103k
www.johnstondixon.com/4117k
www.johnstondixon.com/4212k
www.johnstondixon.com/4215k

Mirvac is being very secretive regarding the results of the auction and the ultimate sales price. In my experience, when the seller and seller's agent do not publicise auction results, this is often because the results were not good. The results were not reported to APM, and so the weekend auction result report for last weekend was even worse than reported for Brisbane.