Showing posts with label madison heights. Show all posts
Showing posts with label madison heights. Show all posts

Sunday, May 4, 2014

Two Tier Property Market in Brisbane?

Is there are two tier market in Brisbane for apartments?  Are Brisbane owners, investors and renters looking for one kind of apartment, but developers are building another kind of apartment for foreign investors?  Some commentators have said that there will be an oversupply of apartments in Brisbane. For a certain kind of apartment, that may be correct.  But for what Brisbanites want, there may be an undersupply.

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.)


Sunday, March 23, 2014

Rents at Madison Heights, Bowen Hills

Madison Heights at Bowen Hills has completed, and apartments are available for rent.  For a 2 bedroom 2 bath apartment,  the listed rent is $445 (with 4 weeks free - so really the rent is $410 a week).  Some are even less.  Under the NRAS scheme, the listed rent for a 2 bedroom is $389 per week.

The building has 308 apartments, with 174 under the NRAS low income rental affordability scheme, which offers apartments for 70% of the market rent (so a two bedroom under this scheme should be $287 a week based on the REA listing quoted above.)  Most of the apartments are 1 bedrooms -- in fact, 228 or about 75% of the apartments in the building are one bedroom apartments with a typical size of 51 sqm internal.

Apt 2901, 2 bedrooms, is for sale for $715,000, which appears to be outrageously expensive.
This two bedroom is $547,000.  67 sqm internal. Crazy!
A one bedroom is for sale for $485,000 -- not a bargain!

Here are some photos of the views from Madison Heights apartments.  The entry to the Airport Link tunnel cannot be seen from these photos, but is just to the right:




Saturday, April 7, 2012

Midwood Report - Brisbane OK

"The outlook for the new Brisbane apartments market remains healthy with supply and demand evenly matched, but the Gold Coast market continues to struggle with sales of new apartments still at post-GFC lows, according to the latest Midwood Report.

Unconditional sales of new Brisbane units increased from 74 in the November quarter 2011 to 186 in the February 2012 quarter. Stock levels have declined to 1,446 from a peak of 1,683 in May last year, which equates to two-and-a-half years’ worth of supply at current sales rates.

Investors have been spurred on by rising rental returns, with one-bedroom inner-Brisbane flats registering rental growth over the past 12 months of 9% to a median of $300 per week, with a smaller 4% increase in two-bedroom flats ($380).

The strongest-selling project was David Devine’s Metro Property Madison Heights development in Bowen Hills, which clocked up 57 sales with prices ranging from $350,000 for a one-bedroom apartment to $434,000 to $556,000 for a two-bedroom apartment. Madison Heights features 296 apartments, with 200 sold since launch of the project in March 2011. There were also 15 sales at Metro Property’s The Chelsea development also in Bowen Hills, with 190 out of 195 apartments now sold in the project. Prices range from $355,000 for a one-bedroom apartment to $546,000 for a two-bedroom apartment, and there were 20 sales recorded for Brooklyn on Brookes in Fortitude Valley, Metro’s joint development with Indian-based developer Pearls. The other strong performer was Meriton’s 81-storey Infinity Tower, currently under construction, with 34 sales recorded and prices ranging from $470,000 for a one-bedroom apartment to $650,000 for a two-bedroom unit. To date 123 out of the 287 apartments in the tower have been sold."

Full article here at Property Observer.

Saturday, August 6, 2011

Reapfield Sells Maidson Heights




If you are thinking of buying a property in Brisbane, why not ask a property consultant in Singapore. For example, Metro Property Group is marketing its Bowen Hills developments in Singapore through Reapfield. They are even advertising in newspapers. One example, above, is the "iconic" Madison Heights development. I wonder if buyers in Singapore know the track record of David Devine and the actual location in Bowen Hills of the property? As reported in the Courier Mail recently, Bowen Hill has 12 traffic bridges. It is not a place that I would want to spend the night.

The image immediately below, from the Reapfield website, shows the proposed Madison Heights location (yellow line) and Chelsea Apartments proposed location (thin red line). Below that is another view of Bowen Hills - Madison and Chelsea are located approximately behind the red circle titled Inner City Bypass.



Sunday, July 17, 2011

Bowen Hills Developments

See article in BusinessDay.

Towers of up to 30 storeys high will soon start being built in Bowen Hills as developers snap up land in Brisbane's booming inner-north. But ailing confidence in the property market has one company struggling to secure pre-commitment commercial sales vital to the commencement of construction. ...
Metro Property Group, headed by property baron David Devine, has also turned its attention to Bowen Hills announcing last month it had sold all 195 units in The Chelsea, on Hamilton and Tufton streets, since the project's launch last November.
Metro Property Group has been given the green light for another two apartment towers of 24 and 30 storeys in the suburb.The developer's 24-storey tower on Mayne Road, which will protrude over the Edgar Street laneway, includes 242 apartments in total. Although the taller tower, The Madison on Campbell Street, exceeds the ULDA's 24-storey general height limit in the precinct, the body's design panel said the additional storeys made the tower appear more "slender".

Sunday, April 17, 2011

Madison Heights Bowen Hills

Metro Property Development and Pearls are marketing a 29 level high rise off the plan in Bowen Hills. The development is called Madison Heights Bowen Hills.

Metro is a recently formed company by David Devine and Ken Woodley. Both are ex-Devine (a listed company controlled by Leightons). Devine has a reputation for building low end apartment complexes. Pearls is an Indian development company.

The Madison Heights development has 182 studio/one bedroom apartments and 104 two bedroom apartments. This gives a total of 286 apartments. However, there are only 204 car parks. So taking into account visitor car parking, about 100 apartments will not have a car park. The development is in an industrial area, on Campbell Street, opposite the Courier Mail printing site, with good views of the hospital and inner-city bypass. There are no amenities around, so a car is needed.

The apartments are tiny. For example, an example two bedroom apartment is 70 sqm, including a 4 sqm balcony. (It is hard to call 4 sqm a balcony -- that is smaller than a bathroom.) Typically, I would not recommend a two bedroom which is less than 85 sqm internally, and even that is small. A good two bedroom should be at least 90 sqm internally. For comparison, you can buy modern two bedroom apartments that are 110 sqm internal.

And pricing is not cheap. A two bedroom, two bathroom which is 73 sqm internally plus a 4 sqm balcony on a low floor is listed for sale at $548,000. This is outrageous. This is over $7,000 a sqm.

Compare this two bedroom apartment in River City, a Devine building (developed by David Devine and Woodley). It is not a great quality building, and it is a few years old, but there is no reason to think Madison Heights will be any better. It is located on Albert Street in the city -- a much better location. It is 76 sqm internal plus 13 sqm balcony, with views of the Botanic Gardens. It has one car park, and is being sold furnished, for "offers over $450,000". So if it sells at $450,000, that will be $5,056 a sqm.

Take care!