Sunday, May 4, 2014
Two Tier Property Market in Brisbane?
Take Bowen Hills for example. It is close to the city, but has very few local amenities. It was a light industrial area, and with highways cutting through it. It is not inner city, and too far to walk to downtown or the Valley. There are no parks or restaurants or river views. There are number of large apartment buildings being constructed in that area, with small one and two bed apartments. A lot of the sales and marketing is targeted at foreign investors, particularly the Chinese. But do locals want to live in these apartments? They are very small, and the buildings are very dense. There are very few owner occupiers in these buildings.
Some examples are Madison Heights (286 apartments) and Chelsea (195 apartments). It appears that it is taking a long time to rent out or re-rent the apartments in these buildings. Rents are being reduced, for example, to $485 for a two bedroom apartment. I suspect that the rental market is saying that, for the location and facilities, you can do much better elsewhere, so the apartments are renting only if rents are very competitive.
On the other hand, river front apartments in Brisbane city, apartments in New Farm, and "normal" residential locations such as Indooroopilly (where very few new apartments have been added to the market in the past five years), appear to be selling well and renting quickly. These apartments are often much larger (130 sqm compared to 75 sqm for a 2 bedroom apartment, for example), have a better location, have more owner occupiers, and there is not an oversupply.
I also wonder what rents and returns the investors in the new apartment buildings have been promised, and what they are actually receiving, and for how long the apartment sits empty not generating rent?
Will the rents hold up when it comes renewal time in six months or a year? Will tenants stay on or move out? The Chelsea is an example of a building that appears to have a number of apartments for rent; it completed in 2012, and received bad press at the time. (An advertisement below from last year for Urban Edge at Kelvin Grove, settled last year, where apartments will be coming up for renewal about now. Kelvin Grove is a much better location than Bowen Hills in my view.)
Wednesday, January 1, 2014
Pradella developments
Riverside, West End
1 bedrooms from $400,000
2 bedrooms from $540,000
3 bedrooms from $929,000
These apartments will be located behind the Waters Edge complex. Project website.
Skyview, Kelvin Grove
1 bedrooms from $335,000
2 bedrooms from $524,000
3 bedrooms from $789,000
Settlement expected late 2014.
Canvas, South Brisbane
1 bedrooms from $346,000
2 bedrooms from $575,000
Settlement expected mid 2014.
Urban Edge, Kelvin Grove -- development completed
1 bedrooms from $429,000
2 bedrooms from $539,000
Waters Edge, West End -- development completed
2 bedrooms from $600,000
3 bedrooms from $889,000
Parklands at Sherwood - development completed
from $395,000
Saturday, September 14, 2013
Kelvin Grove Apartments
Sunday, June 9, 2013
Urban Edge Apartments at Kelvin Grove
Horizons is an 11 storey development, with about 133 apartments. As at late May 2013, about 40 apartments were available for sale. The majority of these apartments are on the Ramsgate Street side, facing west, and not with city views. I counted 20 one bedroom apartments available for sale on this side of the building.
Some example apartments that remain for sale:
- Apt 20808, level 8, 1 bedroom, 52 sqm internal, 66 sqm total, $429,000
- Apt 20506, level 5, 2 bedrooms, 2 baths, 72 sqm internal, 85 sqm total, $550,000
- Apt 21105, level 11, 2 bedrooms, 2 baths, 76 sqm internal, 91 sqm total, $584,000
- See also REA listings
Saturday, April 27, 2013
New Apartment Developments in Brisbane
- 38 High Street, Toowong
- Arena South Brisbane
- Riverpoint, West End
- Urban Edge, Kelvin Grove
- Park at Newstead
- Pinnacle at Hamilton
- Vida, West End
- Hamilton Reach
- Mowbray, East Brisbane
- Aspect on Benson, Toowong
- Savoir Faire, Milton
The above is only a partial list of new and off-the-plan apartment developments in Brisbane. Take care when buying new and off the plan, as often the pricing is much higher than existing near-new apartments in a similar location.
Thursday, September 20, 2012
SkyView Apartments at Urban Edge
Thursday, August 23, 2012
Rental Crash Coming?
If anyone has any evidence on this topic, please let me know.
The economy is not strong in Brisbane. Some government departments are doing forced redundancy programs, where 30% of employees and almost 100% of contractors are being let go. Small business is hurting, with costs increasing and revenue decreasing. My guess is that the actual inflation rate and unemployment rate is higher than being reported.
Tuesday, December 20, 2011
Tuesday, September 6, 2011
Inner Brisbane Vacancy Rates Under Pressure
Inner Brisbane suburbs Milton, Paddington and Rosalie are leading the charge, with figures from the Residential Tenancies Authority showing rent in these areas have risen by about 5.6 per cent over the past 24 months.
Mr Matusik said Milton was a prime example, where vacancy rates had plunged to just 0.7 per cent, with a vacancy rate under 3 per cent considered to be undersupplied. He said about two-thirds, or 62 per cent, of households in Milton were renting, which was representative of other inner city precincts. Mr Matusik said dwindling vacancy rates were not expected to improve in the short term, with the undersupply of new stock set to continue.
“For example, Milton has recorded the second highest population growth in Inner Brisbane at 4.4 per cent per annum over the past five years, just behind Kelvin Grove, which has led to its extremely low vacancy rate,” Mr Matusik said. “It is part of the Inner West precinct, which is one of the most undersupplied markets in Brisbane.
“Just 10 per cent of the current supply of new apartments for sale in Inner Brisbane are located in the Inner West, with FKP’s The Milton the only project currently selling off the plan.”
Tuesday, August 10, 2010
UrbanEdge
Saturday, May 8, 2010
Edenview at Kelvin Grove
Thursday, October 30, 2008
Rates Ripoff in Brisbane
Information released by Brisbane City Council after a question with notice shows some inner city buildings will collectively pour 400 per cent more in general rates in to the city’s coffers than last year, with Kelvin Grove Urban Village facing the biggest rise. The Village’s 213 unit owners paid a total $83,411 in general rates to council in the previous financial year, the information shows. But this will jump to $443,750 for the 2008/09 financial year after changes are introduced in January, designed to increase rates for some of the city’s most expensive inner city apartments. The changes, which take effect in January, will lift the general rate for the average unit owner in the Village from $392 last financial year to about $2100 for this financial year. But just a fraction of those living in the Village are owner-occupiers, meaning all but 23 units are owned by investors.
Other addresses to be hard hit by the new ``parity scheme’’ include the Parkland Boulevard building in Brisbane’s CBD, which will collectively pay 364 per cent more in general rates than last year, increasing the building’s total contribution to $753,000. The building contains 168 owner occupied units and 232 investment units.
Council will collect 300 per cent more in general rates for the year from Riverplace Apartments in Brisbane, where 76 of the building’s 314 units are owner occupied.
Owners of units in Admiralty Towers II in Queen Street will fork out 310 per cent more than last financial year.
Riverscape West unit owners in MacDonald St, Kangaroo Point, face an increase of 150 per cent over last financial year.
The information shows just under 1000 owners of units in 116 inner-city apartment blocks will together boost council’s kitty by $6.3 million this financial year under the changes, representing a 127 per cent overall increase for the addresses.
Central ward Councillor David Hinchliffe (Labor) said the changes would take a toll on residents of Kelvin Grove’s Urban Village, which he said was ``not the most salubrious address.’’ Cr Hinchliffe said the impact on unit owners would be about an 800 per cent increase from one quarter’s rates bill to the next.
But council Finance chairman Adrian Schrinner said the information put to rest once and for all claims people were facing 1000 per cent rises in their rates bills. He reiterated a previous commitment to issue letters to unit owners showing the individual increases they face ahead of the January changes.
See City News
Friday, June 6, 2008
Is Indigo embarrassed about Kelvin Grove?
In this weeks Brisbane News, there is a half page advertisement that has two apartments listed for sale. Strangely, the advertisement does not include the name of the developer or the suburb or the name of the development. It merely says "2km CBD". Internal photographs and floor plans are included, along with pricing (2 bedroom apartment for "only $559,000.")
The advertisement is for apartments in Indigo's Kelvin Grove Village Centre. See this realestate.com advertisement for the same apartment. ("And with 5.25% net rental return guarentee for 24 months, free legals and blinds, this property ticks all the boxes. Will rent unfurnished for $490 per week.")
The advertisement in the Brisbane News also puts the wrong floor plan against each apartment.
Why isn't Indigo identifying the apartment in the Brisbane News as being located in the Kelvin Grove Village Centre? Is it because this is considered to be a detriment, not a benefit?
Monday, September 24, 2007
Indigo Sued - Kelvin Grove Village Development
Today's Australian Financial Review (p. 60) reports a lawsuit against the developer of the Kelvin Grove Village apartment complex by three retailers. The developer is Indigo.
"According to the court documents, an Indigo employee had told the prospective retail tenants that more apartments had been sold in the complex than was the case."
I have always assumed this to be the case for most developments. I have seen agents say "development 50% sold" when that is not the case, or "construction started" when only demolition has started and the developer has not even obtained finance.
The AFR reports that several stores in the Village have already closed down, it would seem due to lack of people traffic.
The retailers are claiming over $700,000 in damages.
I visited the development last year, and my opinion was (at that time) that it was a dog. It seemed that it would take many years, if ever, for the area to develop into something. Although geographically close to the city, it is too isolated -- one cannot easily walk to the city, and the walk is unpleasant as you have to walk along major roads and cross a highway and a railway. There are no decent shops or facilities in walking distance -- other than the ones that are in the complex, and it appears that some are closing or have closed down. No-one I know living nearby would select the Village as a destination for shopping or relaxing.
The website states:
"Bordered by the Victoria Park Golf Course, Brisbane Grammar Schools, Queensland University of Technology, State Primary and High schools and within easy access to Royal Brisbane Hospital, the RNA Showgrounds, the Aquatic Centre, Suncorp Sports Stadium and the magnificant (sic) Roma Street Parklands - its the ideal location."
Really, the site is bordered four other development sites. Or your could say it is bordered by the six lane Kelvin Grove Road and the six lane Inner City Bypass highway. To get to Brisbane Grammar School, you have to cross the Inner City Bypass highway and a large railway line.
It is also in a gully.
About this time last year, none of the $770,000 townhouses had been sold.
A one bedroom is listed today at $420,000 by the developer being sued. Now, that sounds expensive! For that price, you could buy a 2 bed 1 bath in Skyline in the city, or a 1 bed in Quay West, or a 2 bed in a Devine building in the city.
Or you could snap up a 2 bedroom apartment from $549,000 to $625,000!!! (These are 77 to 90 sqm internal.) That is over $5,500 a sqm (including balcony) - very expensive for a suburb apartment building that has been on the market for some time.