Wednesday, September 25, 2013
Oracle Gold Coast Losses
Saturday, February 16, 2013
The Oracle Broadbeach
Apt 2003, 2 bedrooms, now listed for $825,000, originally sold for $1,495,000 off the plan.
Apt 1605, 1 bedroom, sold off the plan for $710,000, resold in January 2012 for $530,000.
Here is another 2 bed listed for $800,000.
Thursday, October 25, 2012
Trouble In Paradise - Soul
Saturday, September 22, 2012
Hilton Surfers Paradise Price Slice
- Level 29, 2 bedroom, 119 sqm, was $1,185,000, now $840,000
- Level 38, 3 bedroom, 147 sqm, was $1,750,000, now $1,300,000
- Level 30, 2 bedroom, 100 sqm, was $1,000,000, now $685,000
Friday, June 15, 2012
Oracle Buyers Loose Appeal
"... there is little support for the conclusion that, in addition to the role played by the Oracle name in identifying the apartments to be sold and purchased, there was also a promise by the vendor that Tower 1 be known or described as The Oracle at the date of completion. If such a promise existed, it needed to be inferred and the inference, if it could be drawn, was far from obvious. ... For the above reasons, I would order that the appeals be dismissed and that the appellants’ pay the respondent’s costs of the appeals, including reserved costs if any, on the indemnity basis."
The main reason the buyers did not settle was because the apartments dropped significantly in value between contract signing and settlement. That is a risk of buying off-the-plan, and is not a ground to refuse to settle.
Friday, April 13, 2012
Another Big Loss For Off-The-Plan Buyer
Purchase price for apartment 601 - $1,010,000
Plus holding costs & interest from settlement until court judgment - $196,631
Less estimated net proceeds if sold today - $700,000
Plus agents fees to sell - $29,645
Plus legal fees to sell - $2,200
Less Deposit - $101,000
Total owed = $437,476, plus interest at 12% until this is paid, plus legal costs of the lawsuit.
So this buyer lost a total of at least $538,476, which is more than 50% of the contract price for the apartment, and didn't get the apartment. Note that the valuation of the apartment dropped 30%. Take care when buying off the plan. (And read this book first!)
Monday, January 16, 2012
Gold Coast Still Oversupplied
Wednesday, December 21, 2011
Off-the-plan craziness at The Oracle
The Oracle - Developer Wins Lawsuits
Interestingly, the judge's decision (which is long and complex) discussed issues about when a residential apartment building is and can be operated as a hotel or short stay letting operation.
"The contract provided that any authorisation of a person as a letting agent would be in the terms of the Caretaking and Letting Agreement annexed to the Disclosure Statement. That agreement provided for the entity appointed by the body corporate to operate a letting business, and to use certain common property for specified purposes. The letting business was not limited to long-term tenancies. Nothing in the Caretaking and Letting Agreement provided that the letting agent could not conduct its letting business so as to attract short-term tenants and holiday-makers. The letting business involved associated services commonly rendered in connection with letting lots in similar developments and “any other lawful activity.” This authorised the provision of services to guests occupying apartments, including guests staying for a short time who might require room service, a mini-bar and other “hotel-like services”."
"The fact that [the onsite manager] provides guests with certain “hotel-style services” does not mean that the tower has ceased to be a “residential tower” in the sense earlier described. The fact that some of the occupants are there for a short term does not mean that the tower is not a residential tower. The contractual promise of a lot in a residential tower relates to a tower used for residential purposes. The relevant provision distinguished the residential component from the retail component of the development. In its contractual context, a residential tower does not mean simply a tower for owners who are residents or long-term tenants."
Sunday, December 18, 2011
Distressed Sales
See full report here and this comment.
Photo above of one of the pools at The Oracle.
Tuesday, December 13, 2011
The Oracle Gold Coast
Agents report that the new prices fit squarely into the current hi-rise market values of central Broadbeach at around $4200-4900sqm.
During the past week, it is reported that 12 Oracle properties changed hands on the new prices with around another dozen or so under offer.
Photos show an Ocean view from a one bedroom apartment in The Oracle.
Update from 15 December: "During the past 24 hours, 6 out of the 59 receivers stock has sold and 18 are on hold." [I suspect that the receiver has more than 59 apartments that are unsold, so this must be a trickled release.]
Saturday, December 3, 2011
Gold Coast Apartments
HTW Month in Review
By the way, The Oracle has a new fancy website.
Sunday, September 11, 2011
Gold Coast High Rise
The article reports that more than $1 billion of apartments purchased at the top of the market are due to settle soon in The Oracle and Juniper's Soul developments.
Lawyers are apparently circling to try to get buyers out of contracts. For example, it is said that Nyst Lawyers believe buyers can get out of their Soul contracts because the Soul development is now being managed by Mirvac under the Sea Temple brand. What a crazy argument. The buyers want to get out of the contracts because the contract price that they promised to pay is now too much. The buyers took a risk, and lost out. You have to be very careful when buying off the plan.
The AFR reports that prices in Soul are down about 17%, based on one resale of a 23rd floor three bedroom apartment, 161 sqm, that sold off the plan for $1.8 million and resold in February this year for $1.5 million.
Friday, September 2, 2011
Soul to be branded as Sea Temple
Wednesday, August 17, 2011
Oracle Litigations
Saturday, July 30, 2011
Oracle Broadbeach
Friday, June 10, 2011
Soul and Mirvac and Oracle and Hilton
LISTED property trust Mirvac Group will operate a luxury hotel at Juniper Group's Soul apartment complex on the Gold Coast.
It is understood Juniper had been speaking to potential operators about incorporating a hotel/resort in the development which had originally been planned as purely top-end apartments.
Juniper and Mirvac are close to finalising an agreement, industry sources say.
Apartment values on the Gold Coast have fallen by up to 50 per cent due to oversupply of projects, many of which were started before the global financial crisis.
The resort in the Soul complex will compete with Mantra's five-star Peppers Hotel at the newly- built $700 million Oracle Broadbeach tower and also the Hilton Surfers Paradise Hotel and Residences, which was part of a development launched by failed Gold Coast developer Jim Raptis.
There is a total of 20,000 hotel rooms on the Gold Coast.
The Hilton hotel is on the market with price expectations of more than $60m on behalf of receivers acting for ANZ.
Oracle was also placed in voluntary receivership in December by Michael Nikiforides, a director of South Sky Investments, a Niecon-related company.
It was also suggested Mirvac briefly looked at takeover target Oaks Hotels and Resorts, for which Thai-based conglomerate Minor International is now a majority shareholder.
Mirvac was not available for comment yesterday.
It is understood that at least 200 apartments in the Juniper Group's Soul apartment project at Surfers Paradise are due to settle in stages from July.
Industry sources said Juniper had been marketing the Soul apartments in Asia with the promise of three-year rental guarantees on a $2m apartment, equating to $2000 a week. There are still 92 apartments remaining for sale at Soul, according to the Midwood Report, although the group provided no details on sales in the complex during the February quarter.
The yet-to-be-completed 77-level Soul tower fronts both the beach and Surfers' main retail strip, Cavill Mall, on the corner of The Esplanade and Cavill Avenue.
INVESTORS who bought into the failed $700 million Oracle Broadbeach development on the Gold Coast have been trying to offload their apartments at auction, but are finding no buyers, according to real estate sources.
It bodes unfavourably for the 200-plus pre-sold apartments in the Juniper Group's Soul apartment project at Surfers Paradise, due to settle in stages from July.
It is understood Juniper has been marketing the Soul apartments in Asia with the promise of three-year rental guarantees on a $2m apartment -- equating to $2000 a week -- and has involved a corporate advisory firm.
Market sources said the apartments at Oracle, on Elizabeth Avenue, Broadbeach, had been put to auction after the investors had settled with the receivers. But the apartments had not sold, mainly because of an expectation receivers would put more stock on the market at steeply discounted prices.
Oracle was placed in voluntary receivership in December by Michael Nikiforides, a director of South Sky Investments, a Niecon-related company. Niecon, of which Con Nikiforides is the chief executive, developed Oracle.
One Oracle apartment owner said then he was aware of people who had bought apartments for $3.5m and had since sold them for $2.5m. As at January, it was believed the developer had secured about $160m from more than 400 pre-sales in the 505-apartment complex, and between October and January about 180 of those had settled.
The value of Gold Coast apartments has typically fallen by 30 per cent since the global financial crisis.
The Oracle project is believed to have cost about $700m, with up to $550m in loans from a syndicate including National Australia Bank, Westpac, Suncorp and Bank of Scotland.
Juniper's Soul, which unlike Oracle is not insolvent, has 92 apartments remaining for sale, according to the latest data from the Midwood Report, although the group provided no details on sales in the complex during the February quarter.
Saturday, March 12, 2011
Gold Coast Sinking Under Apartments Glut
- 2000 apartments worth an estimated $2 billion listed for sale
- few buyers
- dire oversupply
- only 300 apartments are selling on average each year
- between 5 and 7 year supply of apartments
- high asking prices and a reluctance by banks to lend had compounded the oversupply problem
- NAB less likely to lend to the Gold Coast apartment market
- Mr Korda, receiver for The Oracle, estimates average apartment price for the past 10 years has been about $400,000, while the average price for an Oracle unit is $1.2M.
- Soul will add to the glut, where the average asking price for the top third of the 77 storey building is $3.87 million.
- "If you have a $1 million apartment, you could probably only get bank finance for $360,000" Mr Korda said.
- Its a price point and liquidity issue.
Wednesday, January 26, 2011
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:
- 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
See also RealEstate Buzz
Friday, January 21, 2011
The Oracle - Update
SETTLEMENTS for the collapsed $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