The Mood In Brisbane

I have spoken to a number of agents and bankers lately in Brisbane. It seems that the mood in changing, and properties are starting to sell, especially in the $400,000 to $550,000 price range. Buyers, including investors, are buying where the price is right (typically 5% to 10% below the peak), and sellers are accepting offers. Bankers are back in sales mode and appear to be willing to lend. Vacancy rates are low and rents are good.

For example, at the Ray White auction today, a relatively new two bedroom apartment at Indooroopilly (113 sqm in total) sold for $400,000 under the hammer, where the rent is $500 per week. Another 2 bed apartment of similar size in a different complex with river views also in Indooroopilly recently sold after only a few weeks on the market for $485,000.

Good quality two bedroom apartments in the downtown area are renting for $650 per week unfurnished.

But this more confident mood is not the same everywhere. The top end apartment market is very dead. For some apartments over a million, no buyers are calling at all. On the Gold Coast, things are very slow. Juniper's Soul development has been slowed down, with the first batch of settlements being delayed until the second half of this year and there are less construction workers on site. I wonder why?

In short, the mood is picking up in Brisbane for well priced investor apartments.

More on the flood and property prices

The SMH had this story:

Floods Tipped to Hit House Prices

"House prices in Queensland are likely to sink as the financial effects of state's devastating floods strain household budgets and dent banks’ willingness to lend, a ratings agency has warned. ...

LJ Hooker Indooroopilly principal real estate agent Scott Gemmell said it could be 10 to 15 years before some flooded suburbs regain their popularity. ‘‘In the short period it probably scares me a little; what the flood will do to house prices,’’ he said. ‘‘In some cases, houses will be unsellable."

He said he expected a surge in property for sale listings later this month. Mr Gemmell said his office had been inundated with rental inquiries and had compiled a priority list for those affected. ..."

And a similar story: Queensland Rents to Soar, House Prices to Plummet

"... The news is also bad for tenants, with rents expected to soar in line with the surge in demand from displaced residents needing temporary homes. ..."

But, according to another story, landlords will go bankrupt: "Landlords across Queensland are likely to go bankrupt in the next few months, an industry expert has warned."

El Dorado Indooroopilly

From an email from an agent:

"With over 70% of the apartments now sold Pretoria Property group are now finalising their construction finance so as to commence building the iconic apartments in October this year."

An email from the same agent a few days previous says:

"With the development earmarked to complete construction at the beginning of 2013..."

El Dorado Indooroopilly

The El Dorado Indooroopilly apartment development is still selling off the plan, and despite about 2 years of marketing, construction has not started. Some of the three bedroom apartments have been reconfigured as 1 bedroom apartments. The developer is now offering incentives for the smaller 1 bed apartments, which are small and the bedroom is fully internal (edited from an email from an agent):

Pretoria Property Group (developers of Indooroopilly’s ‘El Dorado Village Apartments’) has agreed to provide the following investment package.

Purchase as an investment property the A3 Type or A4 Type 1 bedroom apartments currently available for sale at El Dorado Village and Pretoria Property Group will provide to you from time of Settlement:

• Rental Guarantee @ 5% Gross rental yield paid for 2 years;

• Body Corporate fees paid for 2 years;

• Brisbane City Council Rates paid for 2 years;

• Supply and Installation of Door and Window coverings;

• Depreciation Schedule.

With the development earmarked to complete construction at the beginning of 2013, the above package will mean that the astute buyer will have nothing more to pay until approximately 2015.

So it begs the question, ‘if investors and upgraders are currently driving the residential property market then how much capital growth do you think residential property in Indooroopilly will achieve in the next 5 years’?

Recently in the ‘Matusik Market Update’ (dated March 2010) Michael Matusik stated that, “new apartments in both Toowong and Indooroopilly have seen consistent price growth in recent years. Last year the average annual gain was 5.9%, with owners making $102,000 in gross terms between sales. This compares well within just a 1% average growth rate for apartments across the Brisbane area during calendar 2009”.

In a recent article published by Investors Choice dated 1 June 2010 it was stated, “Brisbane will experience 10% per annum growth over the next 3 years” (click here to See Article).

With the suburb of Indooroopilly being a traditional high growth area the thought of purchasing a secure investment at today’s prices and watching that investment grow in value over the next 5 years is indeed very appealing.

El Dorado Village itself is a mixed-use development that comprises retail, cinema’s, commercial and residential tower. It has been identified that mixed-use developments such as El Dorado command higher growth due to greater demand to live in such complexes (click here to see extract from Michael Matusik).

This is a limited investor special and will only be provided to the first 10 buyers. One bedroom apartments at Eldorado Village start at $397,000.

Riverbend Indooroopilly

Riverbend Towers in Indooroopilly are back on the market. They were offered for sale about 2 years ago, but then the developer decided not to proceed with selling any. Now some are on the market again. The building has 2 and 3 bedroom apartments, and they are a good size. Many have river views. Some road noise. Three bedrooms listed from $710,000

Real Estate Marketing Videos

I like the fact that some agents use YouTube videos to market their properties. Here are some examples:

Quay West, Alice Street, 2 bedrooms

Ciana, 2 bedrooms

Ciana, 2 bedroom listed at $530,000:

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

Indooroopilly Shopping Centre Expansion

Indooroopilly Shopping Centre is expanding again. It will be a negative impact to apartments on Belgrave Road. But this will probably add value to apartments a little further away, such as on Station Road or Riverview Terrace.

The plans are on the Shopping Centre website.

One or Three Bedrooms?

I have always wondered whether developers know what they are doing. Take this for example.

The El Dorado Village Indooroopilly apartment development seemed to have its advertising targeted at suburban empty nesters. The proposed development included twenty end apartments that were three bedroom apartments, 105sqm internal (not large) and 35 sqm balcony. The lower floor 3 bedroom apartments were originally priced from $785,000 to about $825,000 when first released , but when re-launched recently, were priced in the low $900,000 range. There must not have been much interest, because the developer has reconfigured 10 of these apartments into 20 one bedroom and studio apartments. The new apartments are either 53sqm or 55 sqm internal, with either a 13sqm or 30sqm balcony. Priced from $400,000 to $465,000. So this development has lost ten 3 bed apartments and added twenty 1 bed apartments. Over a year ago, I was told by the developer's agent that the developer had finance and would start construction soon. That doesn't sound like it was right.

On the other hand, the developer for Mosaic in the Valley has combined one bedroom apartments to create larger two bedroom and three bedroom apartments. The developer has taken a couple of one bedrooms on the north side of the building and combined them into a two bedroom plus media room (94sqm plus 10 sqm balcony). The developer has also combined three one bedroom apartments on the south side of the building into a three bedroom apartment (134 sqm plus 17 sqm balcony).

In relation to the 2 bed plus media room, they have 2 car parks and the prices are:

Level 13 $799k

Level 14 $820k

Level 15 $840k

Level 16 $860k

So it seems that El Dorado is creating smaller apartments and Mosaic is creating larger apartments.

Are more high rise apartments needed in Brisbane?

Brisbane will need an apartment building boom on the scale of Dubai if it is to accommodate a forecasted growth in population by 2030, the State Opposition claims. However, he estimated as many as 1725 20-storey buildings would need to be built before 2031 in order to cope.

"It is areas like Indooroopilly, Chermside, Mt Gravatt that are designated to do it," he said.

The plan also nominates the Brisbane CBD, Carindale, Toombul, Mitchelton, Wynnum Central and Toowong. Mr Gibson said the difficulty was finding the land in these areas to build thousands more apartments.

"You go through street by street and you identify where you can build 82 new 20-storey building every year for the next 21 years and the land is not there right now," he said.

Brisbane Times & The Australian

El Dorado Indooroopilly

The El Dorodo Indooroopilly redevelopment is being advertised again. It has been in off the plan sales now of over 18 months, with most of the buyers being South African. The prices have been substantially increased.

Here is the current price list for the apartments on the first level (which is immediately above the cinema.)

101 3 bed, 2 bath $845,000
102 3 bed, 2 bath $850,000
103 2 bed, 2 bath, study $780,000
104 2 bed, 2 bath $695,000
105 2 bed, 2 bath $695,000
106 1 bed, 1 bath, study SOLD
107 1 bed, 1 bath SOLD
108 2 bed, 2 bath $690,000
109 2 bed, 2 bath $690,000
110 2 bed, 2 bath, study $775,000

Very expensive!! You can buy a large good quality new two bed two bath apartment in Indooroopilly for $500,000. So these prices are incredible! The project was originally advertised as starting in February 2009. My guess is that it will not start until late 2010 if at all.

REIQ June 2009 Report

"Buyers are again looking to units and townhouses with sales numbers surging over the June quarter. The REIQ June quarter unit and townhouse results show sales numbers have rebounded in this segment of the market. REIQ June quarter preliminary sales numbers show that the number of sales in Brisbane were up 36 per cent; 22 per cent on the Gold Coast; 14 per cent on the Sunshine Coast; and increased a very impressive 48 and 46 in Ipswich and Logan respectively."

"“While sales numbers are up and there has been some price growth in some areas, this represents a property market in transition from the very tough conditions of the past year,” Mrs Bennett said. “These results show that outside influences are starting to no longer burden our market and that confidence is also beginning to return.”

"In Brisbane, solid performers for units and townhouses over the quarter were the inner-ring suburbs of Auchenflower, Toowong and Yeronga. Auchenflower’s median is up 11.8 per cent to $450,000 over the quarter, Toowong’s is up 12.7 per cent to $448,000, and Yeronga experienced 14.7 per cent median price growth to $393,500. Auchenflower and Yeronga also had healthy price growth over the year. Auchenflower and Toowong are both located within 5km of Brisbane’s CBD and have a mix of established and new unit complexes available. Yeronga is 7km south of the city and is in a prime position along the Brisbane River."

Brisbane City - Median Price June Qtr 09 - $351,000 - down 5.8% over one year.
Indooroopilly - Median Price June Qtr 09 - $391,500 - down 6.1% over one year.
New Farm - Median Price June Qtr 09 - $435,750 - down 15.7% over one year.
Sherwood - Median Price June Qtr 09 - $342,500 - up 2.3% over one year.
Taringa - Median Price June Qtr 09 - $398,800 - up 1.6% over one year.
Toowong - Median Price June Qtr 09 - $448,000 - down 4.6% over one year.

Indooroopilly El Dorado Update

El Dorado Indooroopilly redevelopment, which is running a year behind schedule. Prices have risen dramatically! It seems that about nine contracts have crashed since this time last year, as in Sept 2008, the price list showed that there were 25 or 28 apartments remaining for sale. Now:

"Apartments are now selling off the plan with the development due to start in 2010 and the expected completion date is early 2013.

34 apartments are still available as per the attached list and an initial deposit of $5,000 is payable at the time of signing an EXPRESSION OF INTEREST. Body Corp Fees range from $79.41 to $100.90 per week depending on whether you are buying a 1, 2 or 3 bedroom apartment.

More information along with floor plans is now available on the websites below.

www.eldoradovillage.com.au"

Three bedroom apartments, were $805,000, now listed for $925,000
Large two bedroom apartment, was $595,000, now listed at $780,000
Small two bedroom apartment, was $585,000, now listed at $705,000
One bedroom apartment, was $420,000, now $475,000

El Dorado Indooroopilly Update

"Thank you for your enquiry on apartments at the El Dorado Village. We are re launching the project on the 1st of September."

Finding a Good Apartment to Rent in Brisbane

Introduction

Even though the vacancy rate is increasing in Brisbane, many of the good apartments for rent are hard to find. Often, this is because the existing tenant does not leave, and when they do become available, are snapped up quickly. For the better buildings, a large percentage of the apartments are occupied by the owner, and so are not rented out. Also, onsite managers often control the rental rolls, and don't often advertise on the usual property websites (as they don't need to do so). Some have their own website. Also, onsite managers may have a relationship with executive relocation services, that are fed the better apartments.

At one time, a good specialist website for apartments was http://www.seqrents.com.au However, it seems that some buildings are not using this site anymore, or are not bothering to update their listing on this site. So, although useful, it is less useful.

The largest number of listings are located on RealEstate.com.au, but a number of onsite managers do not use this website.

You have to find out how each manager advertises his/her vacancy.

Generally, you want to avoid any buildings managed by Oaks, as they focus on short term hotel style rentals.

Also, look at the posts and links on this blog. This website has a list of most city apartment buildings, with useful information and links about them. Also, try this customized search engine.

Inner City Brisbane:

I recommend Arbour on Grey at SouthBank: http://arbour.com.au/cms/welcome.html

Also, Saville at SouthBank is one of the nicest buildings if you get a river facing apartment: http://www.seqrents.com.au/saville/index.htm. The best thing to do here is call, because the website is not updated regularly. Telephone 07 3305 2559

If you want to live downtown, then I recommend the Admiralty Precinct. This comprises three first-tier buildings (Admiralty One, Admiralty Two and Admiralty Quays), plus River Place (good location, not as good quality) and Skyline (second tier).

Admiralty One is good value, and has some of the largest two bedroom apartments in Brisbane - http://www.admiraltyone.com.au/

Admiralty Two also has good sized apartments, and the building has great facilities. http://www.admiraltytwo.com.au/

Admiralty Quays is newer, and has a great pool, but the apartments are smaller. and it is more expensive. http://www.admiraltyquays.com/

Nearby on the river in the city is River Place, that is not as good quality, but is likely to have availability as this is a large complex. Careful of Storey Bridge noise. Great views.

On Alice Street in the city, if you can get an apartment in Quay West, that is fantastic, as it has park and river views -- for long term rentals, the best agent to try is Blockside & Fergerson for this building. Half of this building is a hotel managed, so it is easy to get short term accommodation in Quay West. All apartments are privately owned. You want to get above level 7.

For an inner city downtown building, Metro 21 is one of the better quality buildings. It has only 4 apartments per floor -- and tries to be more upmarket so is better than most buildings that aim at students -- it seems to have better availability, and some of the two bedroom apartments have three bathrooms. The baloneys are large: http://www.realestate.com.au/realestate/agent/metro+21+brisbane/mlibri
and http://www.metro21apartments.com.au/

Apartments in Suburbs

The suburbs that I recommend, due to location, transport and large number of better quality apartments, are Toowong, St Lucia, Taringa, Indooroopilly and possibly Milton and Hamilton. I don't recommend Chermside.

The newest complex in the Toowong / Taringa area is Fresh. This complex has two pools, a gym and great gardens. http://www.realestate.com.au/realestate/agent/acorn+realty+taringa/nrqhzu

Next door to Fresh is Encore, which is a relatively nice complex, with good pricing (but not as nice as Fresh, and some of the apartments are small). http://www.seqrents.com.au/encore/

St Lucia is harder to find quality -- there are few onsite managers. So you have to try local real estate agents, such as Ray White (who also has listings in Fresh).

In Indooroopilly, there has been recent construction, so there are a number of new, quality buildings. My two picks are Riva and Ciana.

Riva has apartments with great river views. It is a quiet building, with a pool, and is close to the train station and Indooroopilly Shopping Centre http://www.seqrents.com.au/riva/

Ciana is a larger new complex, in a central location, with many large apartments. There is a pool and gym, plus a bowls club! http://www.ciana.com.au/

If you want an apartment complex that feels more suburban, then Parklands at Sherwood is a great choice. Many apartments have park/rural views, and there is a great pool and bbq area http://www.centralsherwood.com.au/.

Nearby is Tennyson Reach, where you can get a large new apartment on the river. This is a new complex, but (apart from river views) not a great location.

This is a list by a selling agent about various inner city buildings:
http://www.openhouserealty.com.au/html/residential/21/apartment-buildings

Brisbane School Districts

When purchasing in Brisbane, it is good to know the school catchment areas. As time goes on, more schools will be subject to a school management plan. Thus, like the USA, property values will be impacted depending on whether the apartment or house you buy is in a good or average school area. Each school has a defined catchment area. The map shows the catchment area for Indooroopilly State High, which is gaining reputation as the best high school in Brisbane -- click on the map to see a larger version.

Western Suburbs

From a Ray White Toowong newsletter:

"An interesting trend in the market has continued to grow over the last couple of weeks. There is a strong number of property sales in the $400,000 to $600,000 range. Predominantly these are apartments in the areas of Auchenflower, Toowong, Indooroopilly, St Lucia and Taringa. The majority of these sales have been made to investors looking for a safe stable place to invest their money. Many of these buyers have bought through their Super Funds..."

Brisbane Vacancy Rate

Vacancy rate for all Brisbane properties (houses and apartments, anywhere in Brisbane) is a low 1.9%

SQM has a good website to look at rental vacancy rates:
Brisbane City (4000 postcode) - 1.7%
South Brisbane area (4101) - 1.6%
Toowong (4066) - 1.4%
St Lucia (4067) - 1.5%
Indooroopilly (4068) - 1.9%
Sherwood area (4075) - 2.6%
Hamilton (4007) - 4.4%
Noosa (4567) - 2.2%
Mooloolaba (4557) - 1.3%

See also story in Courier Mail

"INNER Brisbane rents are increasing at more than 10 per cent a year, with a downturn in new apartments expected to keep vacancies tight.

DTZ Research has shown the biggest growth has been in one-bedroom units in the inner south and inner west suburbs of South Brisbane, West End and Indooroopilly, where rents have risen by up to 20 per cent.

The median rent of a one-bedroom unit in the inner south is now $420 a week, only $10 less than the CBD median price. DTZ director of project marketing Paul Barratt said the strongest growth in the next two years would be in near-city units and middle-ring suburbs with good transport."

Brisbane Unit Auction Results

• Breeze at Indooroopilly,41/8 Belgrave Road: 3 bed, highest bid at auction was $400,000, auctioneers bid of $780,000, passed in, now listed for $900,000
• Admiralty Quays, 144/32 Macrossan Street, Brisbane, 3 bed, sold for $1,885,000
• Skyline, 62/30 Macrossan Street, 2 bed, passed in at $563,000, now listed at $600,000
  
• Dockside Hotel, 601/44 Ferry St, Kangaroo Point, 2 bed, no bid
• Dockside Hotel, 510/44 Ferry St, Kangaroo Point, 2 bed, no bid
• MacArthur Chambers, 104/229 Queen Street, 2 bed, 2 cars, passed in at $720,000, now listed at $790,000
• 95/260 Vulture Street, South Brisbane, 2 bed, passed in at $645,000, now listed at $675,000
• Aurora, 117/420 Queen Street, 2 bed 1 bath, sold for $395,000
• 7/146 Macquarie Street, St Lucia, 2 bed 1 bath, sold for $500,000
  

Most of the above were auctioned at the Ray White Sunday Auction

Best Buys for Brisbane Suburban Apartments

I have looked around this weekend, and these apartments seem to be good buys:

• Ciana at Indooroopilly has about 15 new apartments left for sale from developer. Three bedroom apartment for less than $565,000; large two bedroom apartments from $485,000 to $600,000.
• Parklands Sherwood - large two bedroom with 2 cars and views $535,000
  
• Fresh Toowong - large new 2 bedroom garden apartment at $520,000
• El Dorado off the plan: 2 bedroom apartments less than $600,000
• Precinct Toowong - mid size furnished two bedroom listed at $529,000
• Encore Toowong - 1 bedroom garden apartment listed at $339,000

There is also Tennyson Reach, where off the plan purchasers are trying to sell 2 bedroom apartments for $1,200,000 and three bedrooms from $1.6M. Ouch!