Sunland Abian Apartment Resales on Alice Street

Sunland is in the final stages of completing Abian on Alice Street, in Brisbane city.  The building is high end residential, overlooking the Brisbane Botanical Gardens.  Settlement of new, off-the-plan apartments, is planned for June.

Sunland reports that the development is sold out.  A few apartments are available for resale:

• Apt 404, 4th floor, 1 bed, 1 study, 2 cars, 84 sqm, $695,000
• Apt 1204, 12th floor, 2 bed, 2 bathrooms, 2 cars, 112 sqm, $1.3 million
• Apt 1603, 16 floor, 3 bed, 3 bath, 2 cars, 225 sqm, $2.7 million
• Apt 2703, 27th floor, 3 bed, 2 bath, 2 cars, 225 sqm, $2.7 million

The larger apartments are about $12,000 a sqm.

Next door, is Quay West, built by Mirvac about 20 years ago.  It is interesting to compare recent sales in Quay West.  For example, Lot 60, which is 1 bed, 1 bath, 1 car on about level 10, at 75 sqm, sold in January for $500,000.  Lot 102, which is the same apartment on a higher floor, sold late last year for $513,000.

Also,

• Apt 2102 on the 21st floor is up for auction, which will be a good guide to market price.
• Apt 1203, 12th floor, 1 bed, 1 bath, 1 car, 75 sqm is listed for sale fully furnished at $510,000
• See also Apt 2001

The Quay West apartments are less than $7,000 a sqm.

It will be interesting to see whether the Quay West apartments increase in value or the Abian decrease in value.  Abian, being newer, should have higher values than Quay West, but nearly double the value is hard to explain.

Arbour on Grey - recent sales

It is hard to find out recent sales prices for a number of South Bank apartments in Brisbane.  This is because the land is leased on a 999 year lease.

Arbour on Grey is one of the better apartment buildings in Brisbane - developed by Mirvac about 12 years ago..  Some apartments on levels 3 and 4 have river views.  It is hard to compare apartments in this complex, because the floor plans and aspects are often very different.  There are two buildings - the north building and the south building, which are low arise, with about 6 entries in total.

Grey St is named after Earl Grey, who once had a tea storage facility on the street.

Some recent sales from Arbour on Grey (all two bed, two bath, 1 car park):

• Apt 1110, 172 Grey St - level 1, north building - $660,000  (This apartment is a very large apartment looking over Grey St -- 96 sqm internal, with a 50 sqm balcony.  See www.1110arbour.com)
• Apt 1307, 172 Grey St - level 3, north building - $735,000 (109 sqm overlook South Bank Parklands and Little Stanley Street, with river views)
• Apt 2202, 186 Grey St - level 2, south building - $662,500 (100 sqm overlook South Bank Parklands and Little Stanley Street)
• Apt 2218, 180 Grey St - level 2, south building - $655,000
• Apt 2312, 182 Grey St - level 3, south building - $735,000

There is a three bedroom apartment with a good floor plan currently for sale for $1M plus.

Before buying elsewhere in South Brisbane, it is worth comparing what you get in Arbour on Grey.

Arbour on Grey

One of the better buildings in the South Bank / South Brisbane area is Arbour on Grey, located on Grey St and Little Stanley Street.  It was developed by Mirvac, and is a high quality complex.  It has views of South Bank, and apartments on the higher floors can see the river.  (It is only 4 floors high.)

The two bedroom apartments are typically about 90 sqm internally, with a large balcony of about 20 sqm.  So much larger than many off-the-plan two bedroom apartments currently being marketed.

Some recent sales:

Apt 1307, located on level 3 - 2 bedrooms, 2 bathrooms, 1 car, facing the river - $735,000
Apt 1215, located on level 2 - 2 bedrooms, 2 bathrooms, 1 car, facing Grey St - $620,000
Apt 2204, located on level 2 - 1 bedroom, 1 bathroom, 1 car, facing Grey St - $467,250

Some apartments currently for sale in the complex:

Apt 1110, located on level 1 - 1 bedroom, 1 bathroom, 1 car, large apartment facing Grey St
Apt 2218 - under contract
Apt 2312 - under contract
Apt 2214 - 3 bedroom floor-through apartment on level 2

UniSon by Mirvac at Newstead

Mirvac has announced another apartment building in Newstead, called UniSon.  This will be located on the edge of the "Waterfront" development site.  It appears that there are a number of buildings to come on this site, so you will have plenty of time to select an apartment now or for many years in the future.

The Next Stage of Waterfront Newstead

Mirvac is soliciting interest for the next stage of its Waterfront, Newstead project.

See www.launch2014.com.au

Often, I register on these kind of sites, and never hear back.  When the developer is setting the sales price of apartments off-the-plan, one factor taken into account is how much interest they have in the presales stages.  Developers count the number of registrations on sites such as this, and take this information into account in setting price.

Interstate Property Buyers

The AFR had a story on page 3 on Wednesday this week: "Interstate property buyers see value in northern exposure."  Some extracts:

• Investors from Sydney and Melbourne are flocking to Brisbane's apartment market seeking better value for money after being pushed out of increasingly expensive southern cities.
• Brisbane developer Silverstone Developments reports that 72% of off-the-plan sales in its Vertice project at Dutton Park were sold in interstate buyers.
• Other developers are all reporting surging interest from interstate buyers.
• Mirvac's chief executive for residential said there was an upswing in sales of quality Brisbane properties to interstate investors due to the low rental vacancy rates and increasing rental yields in prime locations across Brisbane, as well as the price differential between Brisbane and those in southern states.
• Since 2007, the gap in prices between Brisbane and Melbourne/Sydney has slowly opened up again.
• Further interest in Brisbane will be contingent upon how may jobs the south-east of the state creates.
• There is a lot more value for money in the Brisbane market, according to Metro Property Group.

Mirvac's Park Apartments

Mirvac's Park building at Newstead is complete, and there are a number of new unsold apartments being marketed by Mirvac.  These include:

• Apt 97 on level 7, 2 bedrooms, 2 bathrooms, 107 sqm - $785,000.  
• Apt 51 on level 13, 3 bedrooms, 2 bathrooms, 148 sqm - $1,325,000

These apartments are $7,336 and $8,952 a sqm respectively.  This seems outrageously expensive to me.    For example, a larger two bedroom riverfront apartment in Admiralty Tower Two can be bought for around $5,600 a sqm metre.  By way of comparison, a four year old, good quality two bedroom in Indooroopilly sold recently for less than $4,200 a sqm.

Canvas South Brisbane

Pradella is selling Canvas in South Brisbane.  It is about to commence construction.  Some advertised pricing:

• Apt 1505, 2 bed 2 bath, 75 sqm internal - $710,000
• Apt 307, 2 bed 2 bath - $595,000
• Apt 508, 1 bed studio, no car, 44 sqm internal - $346,000

Sounds very expensive to me, for this quality product in this location.

For example, this 90 sqm internal apartment, a high quality Mirvac apartment, in a much better location is being sold for "$580,000 plus".

Mirvac Cancels Foreshore Hamilton

Things can't be that good in the property market in Brisbane.

"Mirvac has confirmed its refunding off the plan deposits for Brisbane and Townsville residential projects.  Construction was scheduled to commence on two key apartment projects this financial year, but given the limited sales and concerns on the off the plan market's immediate future looked, Mirvac's John Carfi confirmed to The Courier Mail that contracts had been cancelled and deposits refunded.

The first stage of Foreshore Hamilton was to be a 23-storey building with 263 apartments. Only three of the apartments had been sold, the paper noted. Prices of one bedroom apartments started from $345,000.

 It was possible within about 18 months that Mirvac would reconsider a fresh start on both projects. Mr Carfi said despite there being strong economic fundamentals evident in Queensland, confidence was at an all-time low.  "With the Queensland market, it is difficult to see what the catalyst is going to be (to improve confidence),'' he said."

 See Property Observer

Advertised Rents

In today's Courier Mail and on REA, the following new developments had apartments that were advertised for rent:

• Mirvac's Park apartments at Newstead - 2 beds at $700 a week; 3 beds at $1000 a week; 1 bed furnished at $650 a week
• Pradella's Urban Edge at Kelvin Grove - 1 bed from $345 a week; 2 beds from $485 a week
• Metro Property's The Chelsea at Bowen Hills - 1 bed for $405 a week; or $324 via NRAS; 2 bedrooms from $510 a week

Recent Sales - Arbour on Grey

Some recent sales for Arbour on Grey, at Grey Street, South Bank.  This building was developed by Mirvac about 10 years ago.

Apt 2103, 3 bedrooms, 2 bathrooms, 2 car parks, level 1: $800,500
Apt 2223, 2 bedrooms, 2 bathrooms, 1 car park, level 2: $610,000
Apt 2320, 2 bedrooms, 2 bathrooms, 1 car park, level 3: $660,000
Apt 2225, 1 bedroom, 1 bathroom, 1 car park, level 2: $400,000

This complex rents well.  Currently, there are no apartments available for rent in Arbour on Grey.

There is a 2 bedroom apartment currently for sale for $630,000.

Shrinking Apartment Sizes

In Brisbane, apartment sizes are shrinking.  Newer apartments are smaller than older apartments.  Many two bedroom apartments are now less than 85 sqm in total size (including balcony), compared with about 100 sqm five years ago, or 120 sqm ten years ago.

For example, DoubleOne3, a Devine project, has two bedroom, two bathroom apartments that have a total size of 74 sqm including balcony.  The "Superior" two bedrooms, on the corners of the building are 105 sqm in total size.

As another example, the size of two bedroom apartments in Mirvac's Park development at Newstead range from 96sqm to 112 sqm.  Mirvac builds larger than most developers, to a higher quality.  But compare Mirvac's Quay West development in Brisbane from more than 10 years ago.  There, the two bedroom apartments were 126 sqm.  In Mirvac's Arbour on Grey, from about ten years ago, most of the the two bedrooms were around 109 sqm.

In NYC, the size of new rental apartments is also decreasing, but the size of owner-occupied condos is increasing.  See NY Times.  I think that a similar distinction will arise in Brisbane, where two bedroom apartments less than 95 sqm in total size will be relegated as investor only product.  Moreover, care should be taken when comparing apartments.  Often the smaller newer apartments are more expensive than the older, larger apartments.

Luxury Apartments

• New York apartment on Central Park South sold for $70 million.
• Soul Penthouse at Surfers Paradise, in final stages of completion, hoping to sell for $20M.
• Waterfront Newstead for $8,750,000
• Riparian, Brisbane City, for more than $3M

Park At Waterfront

This weekend, I visited Park at Waterfront, a newly completed Mirvac apartment tower at the Newstead River Park.  The area was dark and desolate.  The Park building is located behind some car dealers, and other industrial properties.  It overlooks a small park and construction site for other buildings.  I would not feel safe walking around this area at night.  But seeing that there is nothing to walk to, I guess that is not an issue.  Why buy or live in an apartment in such an isolated wasteland?  The building itself seemed to be a fine looking building, not that many people will see it.

AFR: Qld Property Due for Kick Start

Extract from Story in the AFR:

For years now, much of Queensland has been a home-grown testament to how property booms can go dreadfully wrong. But a select few see the parlous state of the Queensland housing market as a rare opportunity to pick up homes with great growth prospects at bargain prices. Many see the landslide election of the LNP government as a key catalyst.

Earlier in March, private equity firm Engage Capital bought 19 luxury apartments from the Bank of Scotland in The Macrossan tower in central Brisbane, developed by Macquarie Group. Engage Capital director Ben Grootemaat says he paid about $1 million less for each apartment than off-the-plan prices. He thinks Brisbane values have bottomed and he plans to sell the homes straight away, claiming there is strong demand for the right kinds of apartment at the right price. “There is a lot of demand, especially for three-bedroom residences,” he says. “We have a strong level of interest.”

He’s not the only one positive about the sunshine state. Veteran developers Ken Woodley and David Devine founded apartment developer Metro in March 2010. Since then they have bought or are in the process of buying 2500 apartments in inner-city Brisbane. Woodley says the company sold more than 450 apartments last year, and hopes for a similar result this year. The drivers he is banking on are a tight rental market and the influx of resources employees.

“Because of the huge influx from the resources companies in the office towers, I think what is going to happen within six months is people will have to pay three months’ to six months’ rent in advance to secure an apartment,” Woodley says. “There really aren’t many being built.” But he’s also hoping a confidence boost will come with the reforms new Premier Campbell Newman has promised to deliver in his first 100 days in office. One is stamp duty exemptions for the principal place of residence, which may become law on July 1, costing the government $900 million.

Combined with more interest rate cuts that most banks are still expecting, housing will become more affordable. “I would think those two things would kick start the market,” Woodley says.

The value of houses in Brisbane fell 7.6 per cent in the 12 months to the end of February, according to RP Data Rismark, the worst decline in any mainland capital. The fall in values and dearth of credit have caused a plunge in building. Mirvac research figures show per capita housing levels in Queensland have plunged to their lowest levels since about 2002. But Hoke Slaughter, Morgan Stanley head of real estate investing in Asia, believes the supply-demand picture in Queensland will be “quite attractive” when the market finally recovers. And there are certainly some bargain prices on offer.

Queensland has been littered with receivership sales. Receivers KordaMentha predicted last month there would be an increase in the volume of distressed assets put to market in the state this year as financial institutions attempted to clean up their loan books. Savills agent Greg Harris is selling new townhouses on the Gold Coast that were once priced at $635,000 for about $500,000. He says although prices have fallen 30 per cent, rents haven’t.

Australian Property Monitors senior economist Andrew Wilson says some “green shoots” are emerging in Brisbane. Home values fell 1 per cent in the three months to February, according to his figures, a slower rate of decline than last year. There were other early signs of improvement, such as an increase in home loans and positive feelings about the new government, which may improve buyer sentiment. “The whisper around is we’re just starting to get some early cycle momentum in that Brisbane market,” Wilson says. “With the election behind them, there is always a honeymoon period for the market, which can lead to a more positive attitude.”

Newstead Riverpark

"Developers FKP and Mirvac are major players in the quest to turn 17ha of prime riverfront land into a vibrant new community.  Located only 2km from Brisbane CBD, the Newstead Riverpark urban renewal precinct will become a residential hub, dining and entertainment venue, shopping destination and employment district."
Full story here.

Portside and Hamilton Harbour

This photo shows how crowded this area of Hamilton will soon become with apartment developments.

Site A has development approval for 87 serviced apartments.  Site B has DA for 127 residential apartments.

End of the Road for Mirvac at Tennyson

Mirvac and an off-the-plan purchaser, Mrs Dunworth, have had protracted legal battles regarding Mrs Dunworth's contract to purchase an apartment at Tennyson Reach that flooded.  Mrs Dunworth got out of the contract in this decision.  Mirvac appealed that decision to the High Court, but on Friday last week, the High Court refused leave to hear the case, so Mrs Dunworth wins and does not have to settle.  A rare win for an off-the-plan purchaser trying to get out of a contract.

Devine Hamilton Harbour Settlements

Devine recently issued a stock market release saying:

"Market conditions have continued to deteriorate across most Australian property markets which have had a significant impact on the company bringing new projects to the market."

In Brisbane, Devine has a joint venture with Leightons on a multi-building apartment complex called Hamilton Harbour, where most off-the-plan sales for buildings one and two have reached settlement.

According to the AFR this week, as at late December, Devine had settled 80% of the off-the-plan sales.  Why have 20% not settled?  All may be revealed when Devine's financial results are released shortly.  If 20% of the sales have fallen over, this may impact nearby developments by Brookfield Multiplex, Mirvac and Citimark.

Devine has a rental website for the project, advertising two bedroom apartments for rent from $545 per week.  But some two bedroom apartments are listed on RealEstate.com.au for $795 a week, which seems outrageously high for a 85 sqm apartment facing West.

Apartments in Teneriffe, Brisbane

Rents and apartment prices to face some stiff competition in Teneriffe?

The sky-high rentals and apartment sale prices being charged for apartments in Teneriffe may soon face some stiff competition when the several hundred brand new apartments being built by FKP at its new Gasworks complex combined with those already for sale at Mirvac’s Waterfront complex, both at neighbouring Newstead, come on stream.  There are some 600 units and apartments planned for construction in that area.

This may have been the trigger for the formation for the recently formed Teneriffe Apartment Managers Network. 

A recently released brochure, Renting in Teneriffe, is available around the area and promotes sales and renting of apartments through the on-site apartment managers listed and includes 19 apartment complexes that are let by on-site managers in Teneriffe.  Many of the apartments at Teneriffe are converted Woolstores while others such as Dalgety-Mercantile and Winchcombe-Carson complexes were built around 1994-96. 

Perhaps the Teneriffe apartment complex managers have already concluded that they can expect some fierce competition in terms of property prices and rents towards the end of 2012 when the FKP apartments come on stream, which start at $450,000 just a hundred metres down the road from Teneriffe. 

Woolworths is set to open a supermarket in the FKP complex, and boutique shops are planned along with office space and the 5 hectare Parklands area. It’s going to be interesting to see if rents and property prices hold up in Teneriffe when these complexes come on stream in late 2012 and early 2013.