Showing posts with label price. Show all posts
Showing posts with label price. Show all posts

Saturday, March 17, 2018

Fire Sale

"A mass apartment fire sale could be set to swamp Brisbane in the next 12 months — allowing would-be first home buyers to finally get a foot on the property ladder. 
The inner city housing market is in the grip of an apartment glut thanks to a “record boom” in high-density dwelling construction, according to economic forecaster BIS Oxford Economics.
But it means now could be the best time to bag a bargain.
Managing director Robert Mellor is predicting a frenzy of discounting by developers to take hold for at least another year, with prices for remaining stock in some projects to be slashed by at least 10 per cent to 15 per cent."

Saturday, March 3, 2018

No Price Growth for Brisbane Apartments

RP Data CoreLogic have issued their Home Value Index Report for March 2018.

The medium price for apartments has dropped from $400,000 in April 2017 and $389,000 in August 2014 to $383,000.   This price decline does not take into account stamp duty or agents fees.  For example, a person buying an apartment for $400,000 a year ago, really paid $412,000 including stamp duty, and selling it for $380,000 today is only receiving about $368,000 after agents fees.  So the loss is actually $44,000 or about 10% loss.  It appears that the loss is going to increase over the next few years.

I suspect that anyone who purchased an apartment after 2010 would be selling at a significant loss if having to sell today.

CoreLogic head of research, Tim Lawless, said, “The overall softening in the market becomes more evident when looking at the change in values over the past three months.” 


Brisbane apartment prices (to 28 February 2018)
February 2018 - no change
Quarter - down 0.3%
Year to Date - up 0.1%
Year on Year - down 0.6% 
Median value - $383,000

Grim View of Brisbane Apartment Market

Independent property valuer HTW paints a very depressing view of the apartment market in Brisbane.  HTW says that it is a falling market -- prices will decrease.  Many new apartments are being sold for above market prices.  Rental demand is weak.



Monday, February 26, 2018

No surprise - Brisbane apartments cheaper than Sydney

Sydney apartments are way more expensive than apartments in Brisbane.


Sydney’s median apartment value currently sits 98.3% higher than Brisbane’s median apartment value, which is the largest premium since late 2002.  The average premium for a Sydney apartment over Brisbane has been recorded at 54.1%.

Does this mean that Brisbane apartment values will rise as a result of this difference?  CoreLogic does not think so:

"We would expect the Sydney premium to reduce over the coming years as values decline however, we also believe that historical premiums for Sydney relative to other capital cities don’t reflect the likely differentials in the cost of housing going forward.  That is to say we expect that the cost of housing in Sydney and Melbourne will continue to be higher relative to other capital cities than it has been in the past."

See CoreLogic Report

Thursday, June 15, 2017

REIQ says Brisbane apartment market is falling

According to the REIQ, which is a real estate agents' industry group, the Brisbane apartment market is falling.


Tuesday, May 2, 2017

Recent Brisbane City Apartment Sales

M on Mary
Apt 1506, 1 bed, 1 bath, no car - $310,000

Charlotte Towers
Apt 4011, 1 bed, 1 bath, 1 car - $390,000
Apt 2804, 1 bed, 1 bath, no car - $311,000
Apt 3602 - 1 bed, 1 bath, 1 car - $410,000

Casino Towers
Apt 2306, 1 bed, 1 bath, no car - $310,000

Riverplace
Apt 277, 2 bed, 2 bath, 1 car - $600,000
Apt 157, 2 bed, 1 bath, 1 car - $552,000
Apt 175, 2 bed, 1 bath, 1 car - $552,500
Apt 234, 2 bed, 2 bath, 1 car - $772,000

Aurora
Apt 528, 2 bed, 2 bath, 2 car - $808,000

Admiralty Towers Two
Apt 3, 3 bed, 2 bath, 2 car - $975,000
Apt 95, 3 bed, 2 bath, 2 car - $1,350,000
Apt 100, 2 bed, 2 bath, 1 car - $730,000

Felix
Apt 216, 2 bed, 2 bath, 1 car - $520,000

Admiralty Quays
Apt 49, 3 bed, 2 bath, 2 car - $1,075,000

More the most part, these prices are similar to prices that were being achieved 7 years ago.  Riverplace has had the biggest increase in value over this period.

Monday, May 1, 2017

Brisbane Apartment Prices in Freefall

The latest CoreLogic report, issued today, shows that the prices of Brisbane apartments are falling, dramatically.
See https://issuu.com/corelogicaustralia/docs/2017-05-01--corelogichomevalueindex

Brisbane apartment prices (to 30 April 2017)
April 2017 - down 3.1%
Quarter - down 1.9%
Year to Date - down 2.1%
Year on Year - down 3.1% 
Median price based on settled sales of Brisbane apartments over the quarter - $400,000

A 3% decline on a $500,000 apartment is a loss of $15,000.

Rents are also dropping, on my rough calculation by about 5%.

Sunday, February 5, 2017

Western Suburbs Brisbane Apartments

A real estate agent has issued a interesting report regarding sales of houses and apartments in the Western suburbs of Brisbane (Indooroopilly, Taringa, Toowong, St Lucia.)  The report is available here.

According to this report, the 2016 market was worse than in 2013, 2014 and 2015, based on number of sales and also on total sales prices.

For example, in Indooroopilly, in 2015 a total of $130M in apartments were sold.  In 2016, this dropped to $60M.  In Toowong, $117M in 2015, dropped to $82M in 2016.

It seems that 2016 was a good time to buy but not a good time to sell?

The report lists the top 10 apartment sales in each suburb.  With a number of new buildings reaching completion in 2017, I suspect that the top sales in 2017 will be concentrated in a few of these new buildings.  For example, Aspect Property Group's Centra in Toowong has a number of apartments above $900,000 that settled in January 2017.  All of these sales will be higher than the top Toowong apartment sale for 2016, which was $862,500.

When looking a new buildings, keep in mind this report --  you may be paying top dollar!

Thursday, January 26, 2017

Brisbane City Apartment Sales

Recent sales in November and December 2016:

Parklands
Apt 3104 - 2 bed, 1 bath, 1 car - $590,000
Apt 3036 - 3 bed, 2 bath, 1 car - $650,000

Charlotte Towers
Apt 1207 - 2 bed, 2 bath, 1 car - $460,000
Apt 1502 - 2 bed, 2 bath, 1 car - $490,000
Apt 1704 - 1 bed, 1 bath, 0 car - $322,500
Apt 602 - 2 bed, 2 bath, 1 car - $510,000

Riparian
Apt 4301 - 3 bed, 3 bath, 2 car - $2,562,000

Admiralty Towers One
Apt 135 - 2 bed, 2 bath, 1 car - $615,000
Apt 21 - 2 bed, 2 bath, 1 car - $720,000

Admiralty Towers Two
Apt 29 - 3 bed, 2 bath, 2 car - $1,059,000

Meriton Infinity
Apt 2907 - 1 bed, 1 bath, 1 car - $420,000
Apt 5006 - 2 bed, 2 bath, 1 car - $600,000
Apt 5406 - 2 bed, 2 bath, 1 car - $580,000

Riverplace
Apt 109 - 1 bed, 1 bath, 1 car - $516,800

Festival Towers
Apt 2905 - 1 bed, 1 bath, 1 car - $390,000

Aurora
Apt 248 - 2 bed, 1 bath, 1 car - $400,000

Capital gains were best for direct riverfront buildings and worst for the large apartment towers built by Devine (Charlotte Towers and Festival Towers and Aurora).  The Devine developers now run Metro.


Recent Southbank Sales in Brisbane

Arbour on Grey
180 Grey St
3 bed, 2 bath, 2 car, 191 sqm, sold for $1,165,000
2 bed, 2 bath, 1 car, 106 sqm, sold for $740,000
174 Grey St
3 bed, 2 bath, 2 car, 186 sqm, sold for $1,487,500
3 bed? 128 sqm - sold for $820,000
172 Grey St
3 bed, 2 bath, 2 car, 155 sqm, sold for $1,010,000

Saville
161 Grey St
2 bed, 2 bath, 2 car, 119 sqm, sold for $920,000

Galleria
15 Tribune St
2 bed, 2 bath, 1 car, 120 sqm, sold for $570,000

Saville Southbank

Saturday, January 21, 2017

Brisbane Apartments -- What happens next?

Most predictions for the Brisbane apartment market for 2017 are that prices will fall, and that there is going to be an oversupply or glut of apartments.  Well, maybe.

I think there may be a glut of certain kinds of apartments in certain areas.  For example, there are a large number of apartments under construction in Bowen Hills and Newstead.  Many of these apartments are small apartments in large buildings.  Some of the buildings are not in great locations or have poor aspects.  I am not sure who will want to live in these apartments.

But I don't think the news is all grim.  My reasons for saying this:

1.   In certain areas, there is no a glut of apartments.  Or even where a number of new buildings are under construction or have just been completed, the area has many facilities and a good location.  For example, South Brisbane, Indooroopilly and Toowong have new apartment buildings, but these are excellent areas, and can probably hold up to the new stock entering the market.

2.   Existing apartments that are 10 to 20 years only are good value.  Many are large apartments and are located in the better areas, and have good views.  Compared with newer apartments, which are smaller, the older apartments look very price competitive.

3.  There is a shortage of large apartments.  As baby boomers look to downsize, and wealthy families move from Asia to Brisbane, they are looking for apartments that are more than 120 sqm in size.  There are very few apartments in Brisbane that are spacious and luxurious.

4.  Compared with Sydney, or the freestanding house market in Brisbane, prices for apartments have been relatively flat for the past 2 to 4 years.

5.  Rents have decreased for some apartment types, but I think that rents will not keep decreasing.  I suspect that this time next year, we may start to see rent increases for certain apartments.

6.  Not all apartment buildings that have been announced or that are being sold off-the-plan will actually be built.  The potential oversupply is less than anticipated.  (That being said, there are a lot of apartments under construction, and there will be an oversupply.)

One example to consider.  Sunland is building Abian on the corner of Albert Street and Alice Street in Brisbane city.  The apartments were sold off the plan about 2 years ago (it has sold out) and settlement is likely to take place in June and July this year.  It has a great location, overlooking the Botanical Gardens, and will not be built out other than on the rear side.  It is on a corner block.  It is tall, but there are only about 150 apartments in the building.  Most are large.  The quality of the build and finishings are reported to be super.  There are resales available, and it is said that these kinds of prices are being achieved:
  • Two bedroom, 69 sqm - from $680,000
  • Two bedroom, 103 sqm internal- from $1,150,000
  • Two bedroom and study, about 135 sqm internal - from $1,175,000
  • Three bedroom and study, 150 sqm internal - from $1,700,000
  • Three bedroom and media room, 200 sqm internal - from $2,700,000
This does not suggest to me that there is oversupply of this kind of apartment in this location.  (Or do these high prices tell us that a crash is coming?)

On Wednesday, the AFR had an article that said:  "... This year, that courage may well pay off for investors in established apartments.  In Melbourne, Brisbane and Adelaide, owners of these older style 1930s to 1970s built apartments saw little or no return last year and would have enviously watched houses perform substantially better.  This divergence in performance has been due to an oversupply of new units suppressing the entire apartment sector.  But with a slew of recent ABS data showing the apartment building boom is fading, we may well see the first signs of a recovery in older style unit prices and a vindication for remaining faithful to these assets in hard times."

Is now the time to buy established Brisbane apartments?


Friday, December 16, 2016

Big Discounts to Lure Chinese

On page 3 of the Australian Financial Review on 15 December 2016 is a story titled "Big discounts to lure Chinese unit buyers."  It says that property developers are discretely offering discounts on new apartments in Brisbane and elsewhere to Chinese buyers, in a sign that lending restrictions and oversupply are beginning to affect prices.

Price discounts of up to 7% are being offered on Chinese property website fang.com.

An example is given of discounts on apartments in the Brisbane One complex near South Bank.  For a two bedroom apartment of 86 sqm, there is a $40,000 discount, so that the price is now $675,000.  To me, that discounted price seems to be over-priced!

"The market has slowed down a lot over the past six months and recently the only deals that are moving are those with big incentives."

A real estate agent reported that a number of his clients in Shanghai had been unable to obtain finance and therefore could not settle, and so lost their deposit.

Sunday, October 9, 2016

Brisbane Rental Yields

The resale market for apartments in Brisbane at present is slow.  There are bargains if you are buying, and it is taking a long time to sell if you are a seller, and often the seller is disappointed with the sales price. 

At present, for apartments in Brisbane that are being sold resale (that is, not by the developer off the plan), the sales prices are decreasing.  Rents are also decreasing, as there is an oversupply.  This is a generalisation, and does not apply to all apartment types or all areas.

I have recently studied the Indooroopilly area.  The gross rental yields are good.  For reasonable quality 2 bedroom apartments, prices have dropped about 10 to 15%.  So apartment that were selling for $485K to $530K last year are now selling in the range of $425K to $500K, with most sales being about $450K to $465K.  Some vendors are selling for more than $100,000 less than what they paid.  The rents for these apartments have dropped from a range of $520 to $560 a week to $480 to $510 a week.  New developments with smaller but modern apartments are doing promotions such as 4 weeks free rent.  On an apartment that I own in Indooroopilly, I am getting a gross yield of 5.7% , where the lease was signed last week.  

Small city apartments are struggling, esp those that are rented in short term rental pools.  I have seen one apartment building in an Accor rental pool where net returns (after rates and body corporates etc) on large one bedroom furnished apartments have dropped from $13,000 a year to less than $5,000 a year. 

Friday, September 9, 2016

Declining Apartment Market in Brisbane

The September HTW Month-in-Review report suggests that for Brisbane, it is time to selling apartments and buy houses.  I have noticed that prices for apartments being resold are soft.  An above average apartment that was sold off the plan in 2007 for $550,000 is lucky to sell today for $470,000.

See attached from HTW (click on image to enlarge)



Monday, March 14, 2016

Recent Apartment Sales in Brisbane 4000

Here are some recent sales (all early 2016) with actual sales prices of apartments in Brisbane Postcode 4000.  These are all B and C quality buildings, and so expect to pay more for A quality:
  • Skyline, Apt 91, 30 Macrossan Street, 3 bedrooms, 2 bathrooms, 1 car - $747,000
  • Skyline, Apt 261, 30 Macrossan Street, 3 bedrooms, 2 bathrooms, 2 cars - $800,000
  • Skyline, Apt 41, 30 Macrossan Street, 3 bedrooms, 2 bathrooms, 1 car - $731,500
  • Festival Towers, Apt 3605, 2 bed, 2 bath, 1 car - $529,000
  • Festival Towers, Apt 4006, 2 bed, 2 bath, 1 car - $570,000
  • Festival Towers, Apt 1805, 1 bed, 1 bath, no car - $342,500
  • Festival Towers, Apt 2503, 2 bed, 1 bath, 1 car - $499,000
  • Charlotte Towers, Apt 508, 1 bed, 1 bath, no car - $350,000
  • Charlotte Towers, Apt 2902, 2 bed, 2 bath, 1 car - $540,000
  • M on Mary, Apt 3204, 1 bed, 1 bath, no car - $356,000
  • M on Mary, Apt 607, 1 bed, 1 bath, no car - $360,000
  • M on Mary, Apt 2609, 1 bed, 1 bath, no car - $327,000
  • Felix, Apt 303, 2 bed, 2 bath, 1 car - $600,000
  • Meriton Herschel St (Infinity), 2 bed, 2 bath, no car - $580,000
  • Meriton Soleil - 2 bed, 2 bath, 1 car - $575,000
  • Vue, 92 Quay St, Apt 2301, 2 bed, 2 bath, 1 car - $460,000
  • Vue, 92 Quay St, Apt 2602, 2 bed, 2 bath, 1 car - $437,500

Friday, March 11, 2016

Will Brisbane Prices Increase This Year?

CoreLogic recently reported:

"The trend in home value growth is showing signs of increasing in those markets that have previously underperformed. These include Brisbane, Adelaide, Hobart and Canberra. Affordability constraints as apparent in these cities and rental yields been compressed to the same extent as what they have in Melbourne or Sydney. Home values increased in Brisbane by 5.5% over the past year, which is the fastest annual rate of value growth in a year."

The above 5.5% included houses and apartments.  Below is the information just for apartments, which is not as good.  The question is whether Brisbane will have capital appreciation across the board, or whether it will be limited to certain suburbs, or to houses (not apartments), or to houses and older apartments in better locations.  There appears to be great oversupply of new smaller apartments, in locations such as Newstead and South Brisbane, so capital appreciation of this dwelling type seems doubtful.

Brisbane apartment prices (to 29 February 2016):
February 2016 - down 1%
Quarter - up 0.9%
Year to Date - up 1.5%
Year on Year - up 3%
Median price based on settled sales of Brisbane apartments over the quarter - $391,000 (which is less than reported for the quarter ending May 2015).

Wednesday, March 9, 2016

Property Prices Double Every 10 years?

I have been to seminars by property agents and promotors, where they say that property is a sure investment because property prices double every 7 to 10 years.  CoreLogic debunks that "rule".

"Melbourne is the only capital city housing market in which home values have doubled over the past decade.  In fact, many cities are a long way from having doubled with values in Brisbane, Adelaide, Perth, Hobart and Canberra having all increased by less than 50% over the past decade."

See CoreLogic Report

Monday, January 4, 2016

Brisbane apartment market looking grim

According to the CoreLogic RP Data Home Value Index, dwelling values were absolutely flat across the combined capitals during December, with negative movements in Sydney, Adelaide and Canberra being offset by a rise in dwelling values across the remaining five capital cities. The Sydney housing market was the main drag on the December results, with dwelling values down 1.2%, while values were down 1.5% in Adelaide and 1.1% in Canberra, and down 0.5% for Brisbane apartments.

See full report here.

Brisbane apartment prices (to 31 December 2015):
December 2015 - down 0.5%
Quarter - no change
Year on Year - up 1.8%
Median price based on settled sales of Brisbane apartments over the quarter - $390,000

This is not a good result for the Brisbane apartment market for 2015.

The long term view for the Brisbane apartment market looks very uncertain.

There are a huge number of apartments being constructed.  There are also a number of new hotels opening, which impacts the short term rental markets (for example,  negatively impacting rents in apartment buildings such as Charlotte Towers, Aurora, Felix, Casino Towers and Festival Towers).  At present, from my informal survey, rents are decreasing in Brisbane and vacancy periods are significantly increasing.  This will only get worse.  I am not the only one say this.  See AFR article.

It is likely that valuations for new apartments sold off the plan in Brisbane will come in lower than the contract price, which may impact whether non-cash buyers will be able to settle.

My prediction for 2016 is that we may see values fall in 2nd tier buildings and remain flat in prestige buildings.  Rents will likely continue to decrease.  It looks grim.  What happened to the Gold Coast about 5 years ago (remember, Soul, Hilton and Oracle) may happen in Brisbane this year or next.

Friday, April 3, 2015

Sydney Strong, Brisbane About to Boom?

"Since mid-2013, the average gross rental yield across Australia’s combined capital cities has reduced from 4.3 per cent down to 3.6 per cent. Gross rental yields are now approaching record lows in both Melbourne and Sydney at 3.3 per cent and 3.6 per cent respectively.
Mr Lawless said the latest housing market data is likely to present a further challenge for the Reserve Bank when they deliberate interest rate settings next week. 
"Despite the headwinds of softer labour markets, very low rental yields, increased oversight on lending conditions and heightened economic uncertainty, historically low mortgage rates appear to be adding further stimulus to the housing market, albeit that stimulus is largely being felt in Sydney."
With Sydney now overpriced, Brisbane looks more promising.
Brisbane apartment prices (to 31 March 2015):
March 2015 - up 1.8%
Quarter - up 2.1%
Year to Date - up 2.1%
Year on Year - up 3%
Median price based on settled sales of Brisbane apartments over the quarter - $380,000


Sunday, March 22, 2015

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.