Showing posts with label oracle. Show all posts
Showing posts with label oracle. Show all posts

Wednesday, September 25, 2013

Oracle Gold Coast Losses

Virtually every purchaser off-the-plan at The Oracle development (now branded Peppers) on the Gold Coast has lost money when reselling.  See article here.

Saturday, February 16, 2013

The Oracle Broadbeach

One trouble with off-the-plan marketing is that the apartments are often oversold.  The Oracle at Broadbeach was marketed as a beach apartment complex, but in fact, is not that close to the beach and many apartments do not have good beach views.  Even though the apartments are large, the values have dropped.  Dramatically.  Two examples:

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

The Soul apartment development in Surfers Paradise went into receivership today, most likely due to a large number of unsold apartments, pre-completion off the plan contracts that did not settle, and a falling Gold Coast market.  This is not a surprise.  The Oracle development at Broadbeach went into receivership last year.  At Soul, receivers were appointed over a number of Juniper companies.  Graeme Juniper, who developed a number of apartment complexes on the Sunshine Coast, bit off more than he could chew and got his timing wrong.  See Soul in Receivership

Saturday, September 22, 2012

Hilton Surfers Paradise Price Slice

Hilton Surfers Paradise Apartments advised "up to 34% off":
  • 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
According to Ray White Surfers Paradise, "the Chinese and Singaporeans have saved the Gold Coast property market" because "Australians have stopped buying over the last three years" in projects such as The Hilton and The Oracle.

Friday, June 15, 2012

Oracle Buyers Loose Appeal

A number of off-the-plan purchasers for The Oracle development at Broadbeach refused to settle.  One reason they gave for their refusal was that Peppers purchased the management rights for the complex.  The purchasers lost their appeals today.  There were two decisions, Gough, and Walsh.  See also Courier Mail.

"... 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

Many buyers in Niecon's The Oracle development at Broadbeach purchased off the plan and failed to settle.  A recent court decision shows the losses that an off-the-plan buyer may suffer if the buyer does not settle.

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


"The high-rise market on the Gold Coast is nothing like any other Australian market.
"It's a unique market and it's driven by speculation and not necessarily the fundamentals. But we just don't need any more high-rise developments for the moment.''
Mr Morris said his latest research indicated there were 625 new high-rise apartments for sale on the Coast. That represented a 2 1/2-year supply based on the average sales rate over the past two years.
"But the figure is a bit camouflaged by a rather big project in Southport - Philip Usher Constructions' $200 million H20 on Broadwater development, which is completed, but has not yet been put to the market.
"So there's another 350 apartments just sitting there which, when they get released for sale will add another year to supply, increasing it to 3 1/2 years.''
In the wake of the GFC, the Gold Coast high-rise apartment market has been hit by spiralling valuations and two high-profile victims of receivership, Southport Central and the twin-tower The Oracle Broadbeach.
It has led to heavy discounting of stock, with prices of some luxury apartments slashed by as much as 30 per cent.
But Mr Morris believed prices could fall even further throughout 2012.
"Most of the stock on the Gold Coast is held by receivers and the prices are not being driven by the market.
They're being driven by what the receivers have to do to get rid of the debt,'' he said. ``So it's quite possible the average price of new apartments could sink below the average price of resale stock.''
Research by the Oliver Hume Real Estate Group shows the Coast's total supply of available apartments - low, medium and high-rise - has reached 1626, down from its peak of more than 2000 over the past couple of years.  And the figure is expected to continue to fall with predictions of the strongest summer sales since the GFC. 

Wednesday, December 21, 2011

Off-the-plan craziness at The Oracle

Here is an interesting but sad story about a teacher's aid, who signed an off-the-plan contract in 2006 to purchase an apartment in The Oracle at Broadbeach for $940,000, plus stamp duty.  Unsurprisingly, she was unable to settle and then unsuccessfully sued the developer (Niecon) to get out of the contract.

"She explained that she did not have the funds to settle and that the matter had cost her $7,500 in bank guarantee fees. She explained that she had a mortgage of around $100,000 on her $300,000 townhouse, was in her mid-50s and earned about $550 per week as a teacher’s aide. She asked to be let out of the contract and explained the difficulties that she had in meeting the required deposit of $94,000. She explained that she had brought up her children without maintenance from her former husband and saw the investment in The Oracle as a way of finally getting ahead by using the equity in her home as the deposit."

In early 2010, before completion of the development, she listed the property for sale at a price of $1.28 million. "This price was selected because it would enable her to cover the purchase price, stamp duty and agent’s commission. However, the price of $1.28 million was unrealistic in the light of the global financial crisis and its impact on property prices, even though Ms Ryan had the hope that such an iconic building would not be affected as other parts of the market had been."

What a crazy thing for this person to do.  Why would anyone in their right mind who was earning $550 a week sign a contract to purchase a Gold Coast apartment for about a million dollars?!

See Decision, at paragraph [326] and following.

The Oracle - Developer Wins Lawsuits

The developer of The Oracle at Broadbeach was sued by a number of people who purchased apartments off-the-plan and then, after the market dropped, did not want to settle.  The developer won the lawsuits, and the buyers have to pay significant damages to Niecon.

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

A recently Landmark White report states that about 31% of properties advertised for sale and coming onto the market recently are listings that are distressed sales.  Many of these would be Gold Coast apartments.  The report covers industrial and commercial properties as well as residential.

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

Oracle receivers have released a special new price list for local agents for Oracle apartments in Broadbeach.

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

"The supply of land, units and housing, as predicted was a problem in 2011. This was particularly evident in the unit sector. In spite of no new major projects commencing there is still an oversupply of new and near new unit stock washing around in the market. Unit values have continued to slide over the course of 2011 driven down by a combination of liquidators/receivers holding too much stock, a lack of confidence amongst buyers and a steady supply of mortgagee sales."

HTW Month in Review

By the way, The Oracle has a new fancy website.

Sunday, September 11, 2011

Gold Coast High Rise

The headline of an article on page 21 of the Weekend Australian Financial Review this weekend is "Gold Coast high rise gets a nose bleed."

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

The Juniper Soul building on the Gold Coast will be managed by Mirvac under the Sea Temple brand. With settlements due very soon, it will be interesting to see how many actually settle. Or will we have another Oracle problem? There are already dark shadows and issues about soul food. Even the development debt is for sale.

Wednesday, August 17, 2011

Oracle Litigations

There are a number of litigations against people who signed off the plan contracts to purchase apartments in The Oracle development at Broadbeach, and who failed to settle once the building was complete. The developer is now suing the purchasers for breach of contract. One of the trials is partially complete. Some examples:

Saturday, July 30, 2011

Oracle Broadbeach

A new marketing campaign has been launched by the receivers of The Oracle development at Broadbeach. Take a closer look.

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.

The Australian

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.

The Australian

Saturday, March 12, 2011

Gold Coast Sinking Under Apartments Glut

The front page of the AFR on Wednesday, 9 March 2011:

"Gold Coast Sinking in Units Glut"

Summary:
  • 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:

Some of the Oracle apartments for sale:
Note that there are two towers: Tower 1 is 50 storey's, comprising 274 luxury apartments (faces the ocean with ocean views) whilst Tower 2 is 40 Storeys, and comprises 241 apartments (faces North East (behind Tower One)).

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