Friday, December 24, 2010
Differences in Apartments
Thursday, November 18, 2010
Gold Coast Collapsing
Story from the AFR on Friday last week - "Banks judge Gold Coast apartments as vulnerable".
"Westpac Banking Corp has a particularly cautious view, especially of luxury properties worth more than $3M on the Gold Coast, which is described as a key area for 'additional risk management focus'. There are hundreds of apartments on the Gold Coast priced at more than $3M. At the Oracle development at Broadbeach, there are at least 50; at two other projects coming to completion - Juniper's Soul and Brookfield's Hilton - there are more than 100."
Story from The Australian today: "Gold Coast High Rise Stress Underestimated"
"MAJOR bank Suncorp estimates that less than 10 per cent of buyers are defaulting on several major apartment projects on the Gold Coast.
Gold Coast property agents have claimed the estimate was extremely optimistic. ...
"They'll be celebrating in the streets if it's only 10 per cent default," one Gold Coast agent said.
"There's a lot of rumours around about settlements, but it's all looking very slow."
Soul has been on the market for five years and, while the market boomed for the first three of those years, the global financial crisis cut the value of these units substantially."
Saturday, November 13, 2010
Rental Returns - from RP Data Property Pulse
Unit rental growth over the last five years has also recorded significant increases in Darwin (84.0%) and Perth (61.7%). The three largest cities have recorded the lowest levels of rental growth at 39.6% (Melbourne), 40.6% (Brisbane) and 42.8% (Sydney). ...
Saturday, October 23, 2010
Undervalued Brisbane apartments
- Admiralty Towers One - undervalued - large riverfront apartments, with an excellent new onsite manager
- Admiralty Towers Two - possibly undervalued - large riverfront apartments, but onsite manager has gone bankrupt and some owners hostile to body corporate committee leading to inefficient building management
- Admiralty Quays - at value - beautiful riverfront building, but apartments are smaller than Towers One and Two
- Riverplace - at value - great location on riverfront with large balconies, but lesser quality than Admiralty buildings, and larger less personal building
- Skyline - overvalued - poorer quality building surrounded by other buildings
- Evolution - significantly overvalued - located on a freeway, sold mostly to Asian investors, small poor quality apartments in badly managed building
- Casino Towers - overvalued - good views from some apartments, but these apartments face West and views likely to be built out when old State Library site redeveloped into multistory tower
- 212 Margaret - overvalued - located on edge of construction site
- Charlotte Towers - probably overvalued - many apartments listed for sale and not selling
- Festival Towers - probably overvalued - poor quality Devine building, likely to be further surrounded by new development and remaining views built out
- Quay West - undervalued - large apartments with Gardens and river views never to be built out, well run building with good finances
- Grosvenor - at value - large apartments with Gardens and river views never to be built out, low turnover of apartments
- Felix - overvalued - smaller apartments looking with little privacy
- Metro 21 - mixed - great difference between apartments in this building - smaller well run building with much better value than the Oaks run buildings, but one bedroom apartments in this building are not great
- Aurora - overvalued - large, poorly run building
Thursday, September 3, 2009
Valuer's Report
Monday, January 26, 2009
Property Promoter's Opinion
"Depending where you live, property values in your state would have grown a few percent or dropped a few percent overall. Of course we all know that the value of certain properties fell much, much more than that, some by more than 20%. And some segments of the market, in particular the higher priced properties, holiday properties and rural properties, markedly dropped in value. "
See Property Update for full report.
Saturday, November 1, 2008
Which Buildings Have More Owner Residents?
Community Title Scheme Name | Number of Units | Number of Owner-occupied Units | Percentage Owner Occupied |
ADMIRALTY QUAYS | 173 | 59 | 34% |
ADMIRALTY TOWERS | 151 | 49 | 32% |
ADMIRALTY TOWERS II | 193 | 71 | 37% |
ALLEGRO APARTMENTS | 117 | 16 | 14% |
CASINO TOWERS | 214 | 34 | 16% |
CENTREPOINT | 51 | 20 | 39% |
CHARLOTTE TOWERS | 415 | 29 | 7% |
CORONATION RESIDENCES | 48 | 22 | 46% |
CUTTERS LANDING - CUNNINGHAM | 33 | 14 | 42% |
CUTTERS LANDING - FLINDERS | 84 | 53 | 63% |
FELIX | 254 | 48 | 19% |
FESTIVAL TOWERS | 401 | 51 | 13% |
KOKO APARTMENTS | 110 | 36 | 33% |
LEXICON APARTMENTS | 89 | 16 | 18% |
OXYGEN | 191 | 34 | 18% |
PARK AVENUE AT SOUTH BANK | 56 | 32 | 57% |
PARKLAND BOULEVARD | 400 | 168 | 42% |
PRECINCT TOOWONG | 46 | 19 | 41% |
QUAY WEST BRISBANE | 136 | 28 | 21% |
QUEEN STREET 570 | 127 | 9 | 7% |
REGATTA APARTMENTS | 59 | 17 | 29% |
RIPARIAN PLAZA APARTMENTS | 48 | 23 | 48% |
RIVER PLACE APARTMENTS | 314 | 76 | 24% |
SKYLINE APARTMENTS | 185 | 37 | 20% |
THE AURORA TOWER | 472 | 128 | 27% |
THE GARDENS | 107 | 23 | 21% |
TRILOGY RESIDENCES | 121 | 8 | 7% |
WILLAHRA TOWER | 106 | 16 | 15% |
Wednesday, October 8, 2008
August Property Value Index
RP Data Rismark Index for August
"The national end of month property indices report released by RP Data & Rismark International confirms that the supply and demand imbalance currently being experienced in the Australian property market has placed a floor under housing prices, resulting in minimal value falls.
Based on the analysis in the report, this is most evident in the metropolitan areas around the country where record population growth has not been accompanied by new dwellings to satisfy the housing demand.
According to RP Data National Research Director Tim Lawless the property market has proven to be remarkably resilient with national dwelling values remaining positive over the 12 months ending August 2008. Over the three months to August 2008 there was a modest decline with property values down by just 0.96 per cent over this period.
Mr Lawless said the recent figures should put to rest claims that Australia’s property market is headed for a crash. “In fact, values are holding relatively firm particularly when compared to the benchmark equities S&P/ASX 200 Index which dropped by 19 per cent between January and August,” he said.
One of the most interesting findings in the indices release today was the convergence of the capital city market dynamics over the past six months which revealed that all capital cities recorded slightly negative growth; no particular city was significantly out of step with the others.
According to Rismark International’s Dr Mathew Hardman “Clearly, the observable phenomenon of the two-tiered markets in Sydney and then in Melbourne and to a lesser extent in Brisbane and Perth has disappeared ”
“Market movements are now similar across all metro areas rather than value falls being isolated within the mortgage belts. This balancing can be attributed to the squeeze the more affluent markets are experiencing due to the turbulence in the financial and equities sector.
“Looking towards the next six months, strong excess demand in most capital cities is creating a floor under property values, making large falls unlikely,” Dr Hardman said. According to RP Data, with population growth projected to remain high and interest rates falling, the demand/supply imbalance is expected to protect the market from any major falls in property values. Rismark International’s Dr Hardman believes that unemployment is not a major factor driving property prices; affordability, excess demand and market momentum are far more significant he said.
“Although unemployment is rising, unless it grows rapidly to significantly greater levels, eg 6 or 7 per cent over the next couple of years, excess demand will eventually outweigh affordability constraints and begin to push property markets upwards again, probably by the second half of 2009.”
Brisbane
- Brisbane has actually fallen more than Sydney & Melbourne over autumn & winter: on average by 3 – 5 per cent. The median house value is now $455,146 and the median unit value is now $326,606.
South East Queensland continues to be the strongest population growth region in Australia. Such strong demand for dwellings will continue to place upwards pressure on values over the medium to long term.
Friday, August 15, 2008
Brace for the BOOM!
Monday, August 11, 2008
That’s the front cover headline of the September 2008 issue of Your Investment Property magazine. BIS Shrapnel predicts Brisbane will grow faster than any other capital city with the median house price to jump from the current $422,000 to $515,000 by June 2011. That’s a huge 22% increase in just 3 years!
Underpinning this strong growth forecast are several key factors:• supply and demand – last year 90,000 people migrated to Queensland from interstate and overseas. Approximately 44,000 new dwellings need to be built next year to accommodate this rapid growth, however, only 33,000 are expected to be constructed, resulting in a shortfall of 11,000 new homes
• higher rental yields – rents have risen 15-20% during the past 12 months. Independent property analyst Michael Matusik predicts rents will rise by a further 17% in the next 18 months
• lower interest rates – we should see the first official rate cut in a month or two, with several more reductions to follow during the next two years
The bottom line is that regardless of whether you are buying as an Owner-Occupier or Investor, now is the time to secure your next property before prices take off again!
Monday, August 11, 2008
RP Data Rismark Update
"Most markets fall slightly in value through winter but U.S. experience won’t happen here. The RP Data/Rismark International end of month property indices report released today confirms what most people know to be true already; we are seeing modest declines in most property markets. However, RP Data National Research Director Tim Lawless said that the good news for buyers is that property is not a homogenous market and if you look at the flipside of this downturn, it may well prove to be the ideal buying window as speculation that interest rates may stay on hold and rents continue to surge.
Brisbane Property Market
• Brisbane house values have fallen on average 2% and 0.2% for units over the last six months, versus an average rise of 7.5% over the past 12 months.
• Prices of home units in the inner and south eastern suburbs have held and in many areas risen as prospective buyers choose a unit over a house due to affordability."
BIS prediction
He added that it was a good time for buyers looking to upgrade to a bigger home.
"With a 10 per cent increase in the amount of people looking to rent, a figure that is expected to increase, it is a great time for investors." The financial markets are factoring in an interest rate cut, possibly as early as next month, but even without it, Mr Mellor predicted an upturn, so long as rates did not rise again.
"Common sense will win out in the end," he said. "Buyers will realise that all the fundamentals that make it a good time to buy are there."
See http://www.theaustralian.news.com.au/story/0,25197,24158947-25658,00.html
Saturday, July 26, 2008
Find Me A Home
From my quick review, it is not very user friendly or accurate.
Using a map interface, it lists properties for sale. First, the list is not comprehensive. Second, it lists properties for sale that have been sold.
When selecting a property, it gives an indicative value. For the apartments that I looked at, the indicative value is not very accurate.
For example:
- A two bedroom apartment in Quay West - indicative value given as more than $1,348,000. This apartment would be, at best worth in the $800,000s.
- A one bedroom apartment in Charlotte Towers - indicative value given as more than $731,000 to $837,000. This apartment would be, at best worth $400,000 (most likely $360,000.)
- Casino Towers, Apt 3702, indicative value given as more than $1,166,000. This apartment recently sold at auction for $705,000.
Sunday, July 13, 2008
Valuer's Report
Herron Todd White's July Month In Review Report includes the following about South East Queensland:
Brisbane
"Our sunny market outlook has greyed somewhat after recent rate rises. The mixed signal from commentators has put a large percentage of investors on the back foot. A portion of those in the know continue to sing the South-East QLD song of praise, hitching their star to our increasing population and seemingly boundless potential, but other equally wizened souls note we are getting a bit big for our boots. Buyers do not have bottomless pockets, they venture, and the market is due to check itself. The confusion has also been noted by agents who are seeing different sectors performing at different speeds with no clear cut idea of how it will all pan out. ...
Historically, Brisbane has not been susceptible to dramatic market fluctuations, which means most punters are able to bear the brunt of change. This time may be different, however as the recent boom has been unprecedented for most and unless smart, developers may find the landing more bumpy than expected."
Brisbane apartments:
Rental Vacancy: severe shortage of available property relative to demand
Rental Vacancy Trend: Tightening
Demand for New Units: Fair
Volume of New Unit Sales: Declining
Stage of Cycle: Peak of Market
Are New Properties Sold at Prices Exceeding Their Potential Resale Value: Frequently
Gold Coast
"Market conditions have slowed on the Gold Coast in the past 3 to 4 months, with agents generally reporting subdued levels of enquiry. Some agents have proposed that there has been as much as an arbituary 10% drop in market values which would almost cancel out gains achieved during 2007. It is difficult to ascertain the extent of the slowdown in the second hand property market with the reduced turnover of sales. Some sectors still continue to perform or hold their ground in light of the underlying economic issues. A good indicator of the market slowdown is the performance of new unit complexes, townhouses, and house/land packages. Marketing agents have reported a significant drop in buyer enquiry. Subsequently rates of sale have fallen. Developers are now in a position where they are offering incentives to “prop up” the fall in rates of sale.
...
Those that purchased off the plan in 2006/early 2007 to speculate on a new high-rise unit project, are now only realising that their purchase was in vain. Should they forego their deposit, the unit goes back into the sales pool further placing pressure on supply."
Gold Coast apartments:
Rental Vacancy: balanced market
Rental Vacancy Trend: Steady
Demand for New Units: Soft
Volume of New Unit Sales: Declining Significantly
Stage of Cycle: Declining Market
Are New Properties Sold at Prices Exceeding Their Potential Resale Value: Frequently
Sunshine Coast
"We also are seeing incentives being offered and the return of ‘extraordinary marketing techniques’ to non-locals to help sell unit projects. Rentals for both houses and units remain strong and underpin demand with no suggestion that this is going to ease. Punters must also be concerned with the fluctuations in the stock market and some will transition back into property where there is strong rental support and long term potential for capital growth."
Sunshine Coast apartments:
Rental Vacancy: shortage of available property relative to demand
Rental Vacancy Trend: Tightening
Demand for New Units: Soft
Volume of New Unit Sales: Declining
Stage of Cycle: Bottom of Market
Are New Properties Sold at Prices Exceeding Their Potential Resale Value: Occassionally
Saturday, July 5, 2008
Housing Market Flooded in Brisbane, but Few Buyers
From The Courier Mail, 5 July 2008:
"STRESSED home owners and investors are flooding the market with thousands of houses but agents say they can't find any serious buyers for some properties.
As home mortgage lending in Queensland dives for the second consecutive quarter, the number of houses for sale is up 150 per cent compared with the same time last year.
There were 4750 new listings added this week - 1842 in Brisbane.
Almost 40,000 residential properties are listed for sale across the state, compared with 15,900 last year.
Auction clearance rates are suffering in the slowdown.
At yesterday's Ray White's corporate auction, just one of 11 properties was sold under the hammer. The three-bedroom unit in Casino Towers sold for $705,000.
It was a similar story last week, when 12 properties were put to market, and only one - a Norman Park home - was sold for $840,500.
The marketing agent for a prime residential site near the Brisbane River said a recent auction of the property failed to get any bids.
And the one buyer who showed some interest had now gone cold.
"Just finding anyone interested has been a problem - last year there would have been a handful," the agent said.
At yesterday's auction chief auctioneer Philip Parker said he was surprised when just two early bids were heard for an inner-city house.
"It's good real estate - you'd think you'd have more (bids) than that," he said...."
Tuesday, June 17, 2008
Prediction from BIS Shrapnel
Interest rate rises to stall residential property price growth in most centres despite record net overseas migration and a rising deficiency of dwellings.
Independent economic forecaster and industry analyst, BIS Shrapnel, expects all Australian residential property markets will experience marginal price increases in 2008/09 as interest rate rises halt price growth rather than force a downturn.
BIS Shrapnel is forecasting another interest rate rise to come through in September quarter 2008. Despite a further rate increase, the average cost of renting is set to rise much more than the cost of buying in 2008/09 and 2009/10, due to the undersupply of new housing.
Saturday, June 14, 2008
REIQ Apartment Price Report for Brisbane - First Q 2008
REIQ March Quarter Unit Report:
Downtown Brisbane:
Median March Quarter: $450,000
Median 12 months to end of March 08: $449,755
Change over 1 year - 6.5%
West End:
Median March Quarter: $625,000
Median 12 months to end of March 08: $518,500
St Lucia:
Median March Quarter: $510,000
Median 12 months to end of March 08: $401,500
Indooroopilly
Median March Quarter: $425,000
Median 12 months to end of March 08: $401,750
From the Brisbane Times:
"REIQ chairman Peter McGrath said current figures reflect historical averages for the year's first quarter.
"Brisbane is coming down off a high, so to speak ... the market is simply returning to normal," Mr McGrath said.
Yet Mr McGrath conceded investor demand has cooled recently as servicing increasing loan repayments becomes more difficult.
"Investors appear to be staying out of the market until rents reach a level where they match the increase in interest rates and they are confident that the market has definitely stabilised," he said.
The trend has been felt hardest within the CBD, where apartments in complexes on Charlotte Street have remained unsold for four months.
"It is taking 30 days longer to sell inner-city apartments because investors are bowing out," LJ Hooker Brisbane Central principal agent Alexandra Rutherford said.
Prices have been scaled back accordingly Ms Rutherford said.
"We have had apartments priced at $480,000 reduced to $460,000 and some reduced to $420,000."
However, Mr McGrath warned real estate agents against judging the current market against last year's anomoly.
"I don't think some agents realised how good it was last year, thinking. it could last forever. Now we are just moving back to a more traditional market," he said."
Friday, June 6, 2008
Comment on Matusik
"I think the report misses some important trends, there are also quite a few factual errors.
For one, not ALL US houses mortgages are non-recourse, only a few states including California. MOST US houses mortgages are recourse. The biggest difference between the US and Australia is the commodity boom, but how long will that last?
Second, all the 0-down, interest-only mortgages are mushrooming in Australia as well. Australia also has stated-income loans which is no different from the US.
Second, he entirely misses the point of what commodity boom does to evolution of cities. If he concedes that the commodity (particularly energy) boom will go on for years, which argues for a booming property market, then it is the inner cities or places with good public transportation will benefit. However, he was presenting a sprawling suburban future that is completely impossible with oil price heading for the sky. He predicts that people will start commuting from Blue Mountains, it is just not going to happen if gas price is on the current track.
He is also completely off the mark in predicting a mild US recession. Many financial heavy weights including Warren Buffet, Jim Rogers, George Soros etc have come out to say that this is going to be the worst recession since the Great Depression, which is a euphemism of saying Great Depression Episode II.
The funniest of all is, if he thinks everything is rosy, US will recover in 2009, and Australia's commodity boom will go on forever, why will interest rate FALL in 2009? Shouldn't interest rate fall because the economy is NOT doing so well???
I can understand that Matusik is always arguing that property can only go up up up because he is sponsored by real estate developers, but this report just looks way to biased, to the extent that he cannot even get facts right."
Wednesday, June 4, 2008
Matusik on Brisbane Property
Matusik, who is often engaged by developers to write reports that are provided to potential purchasers, states the following in a seminar given for Urban Pacific at Fernbrooke on 28 May 2008:
- one in three new apartment projects fell over in 2007. The attrition rate could be as high as 50% this year.
- the cost to provide new inner city apartments is much higher now than suburban detached housing. i.e. $575,000 for 2 bed apt (85sqm/1 car space) versus $385,000 for 3 bed house (225sqm/320 sqm allotment)
- overall today investors make up less than 30% of the market.
- 80% of detached houses are held by owner-residents as is 50% of our semi-detached product, whilst over 70% of attached product is owned by investors.
- nearly 70% of Australia’s attached dwellings is occupied by residents under 30 years of age
Monday, June 2, 2008
Brisbane Apartment Prices Still Increasing
"The RP Data/Rismark International end of month indices report released today confirmed that capital growth in the key markets of Sydney and Melbourne has flattened considerably during 2008. ...
RPData's Research Director, Tim Lawless, is confident that the supply side imbalance in the national housing market will see further property value increases over the next five years. “We expect low levels of housing supply to continue placing upwards pressure on housing prices over the long term. However in the short to medium term, demand side constraints are acting to slow the market. Most importantly, the current high inflationary environment is causing a high degree of uncertainty in the market which translates to low buyer and investor confidence. Cashed up buyers now have a large amount of leverage as a result of current market conditions especially now that properties are taking longer to sell and there are fewer buyers,” Mr Lawless said. “The best immediate opportunities can be found in Adelaide, Brisbane and Darwin, not to mention many of Queensland’s regional areas.”
Brisbane is also continuing to show solid growth in property values with overall growth of around 3 percent for houses and units during the first four months of 2008. The value gap between Brisbane and Melbourne is becoming wider as growth in the Melbourne market has slowed considerably. At the start of 2007 house values in the two cities were virtually on par, however the stronger value growth in the Brisbane market has seen Brisbane house values g g now 5 percent or $24,000 higher than Melbourne’s."
March 2008 Median Unit Price Brisbane = $344,247
April 2008 Median Unit Price Brisbane = $346,184
April year to date increase = 3.14%
April 12 month (year on year) increase = 18.12%
Days on Market April Quarter = 16 days
Yield - Brisbane apartments - March Quarter = 4.76%
See Rismark - RP Data report.
Saturday, May 10, 2008
Ray White's Inner City Unit Report
Ray White's Inner City Unit Report 2007 has the following statistics:
Brisbane CBD (downtown area only) for apartments
Year 2007:
Number of Sales - 940
Median Sale Price - $445,000
Highest Price Sale - $4,700,000
% Brisbane Change - 4.5%
506 apartments sold between $250,000 and $499,999
188 apartments sold between $500,000 and $749,999
63 apartments sold between $750,000 and $1M
Year 2006:
Number of Sales - 817
Median Sale Price - $425,000
Highest Price Sale - $3,800,000
% Brisbane Change - 8.5%
486 apartments sold between $250,000 and $499,999
168 apartments sold between $500,000 and $749,999
40 apartments sold between $750,000 and $1M
Year 2005:
Number of Sales - 1,049
Median Sale Price - $392,000
Highest Price Sale - $7,370,000
% Brisbane Change - 11.5%
542 apartments sold between $250,000 and $499,999
181 apartments sold between $500,000 and $749,999
41 apartments sold between $750,000 and $1M