Save West End

See www.savewestend.org

West End Developments - Flood Issues

""I am aware of four major unit development applications in West End along Montague Road that are currently being assessed by Council planners," said Cr Abrahams. “It is important to take the time to learn why residents of many of the unit blocks along the river in West End are still unable to return to their units. The flooding of the car parks and ground floor units of these apartment buildings was devastating for all unit owners,” said Helen Abrahams.

“Units are still without power, some without sewage services and so property managers have no option but to advise owners not to move back in. Some unit owners whose units were not flooded still do not know when they will be able to return to home," said Helen Abrahams.

“Clearly, it is necessary for a serious review of whether it is appropriate for high rise units along this river bank,” said Cr Abrahams."

Full Story

Flood Update

When driving down Coronation Drive tonight (Monday), some apartment buildings were dark and empty. This included Coronation Residences. Koko apartments at West End were dark, but I understand only the basement was flooded. (Update: As at Australia Day, Koko Apartments were still evacuated; and Pradella's Left Bank carpark was still closed.)

Koko video one, two and river

Pradella

I repeat this comment from a reader, who purchased at Parklands Sherwood from Pradella, the developer. I agree.

"One has to wonder how the planning controls that regulate development could be allowed to bypass the building flood heights of 1974.

The floods came perilously close to inundation through those long dark hours of the 11/12 January 2011. The townhouses were going under the Resident Manager was knocking on the doors advising all to evacuate. We all wondered what would be the outcome.
Pradella, I wonder….. who you fed your big fat envelope to! When you were spruking to purchasers that the 1974 flood height was to the level of the swimming pool and that the complex would be built 2.5 metres above this height so that there would never be any flood risk.
I was assured when I purchased my apartment Parklands @ Sherwood from Coldwell Banker the selling Agents for Pradella Developments that the complex would not flood as it was built 2.5 metres above the 1974 flood levels. Do you think I would ever waste my money buying an apartment which was in the 1974 flood zone.
Who do you hold responsible? The Developer Pradella, The Water Board!, and/or the Brisbane City Council who aided and abetted in the development.
Why did Queensland Water allow a massive discharge of 645,000 megalitres from Wivenhoe Dam on Tuesday, at the peak of the flood crisis.
Between cleaning up and moving out on Tuesday 12 January 2011, several owners have expressed dismay that the only people that Pradella’s on site Managers addressed was their 30 or so rental Property tenants not once in their address did anyone from PRADELLA acknowledge the huge financial losses now impacting the Owners, nor the disruption to living and the associated expenses imposed as a result of water inundation.
Somebody from Pradella maybe even Mr Kim Pradella himself should explain to property owners the true flood levels and the Council should consider why the development, should have been approved!
Confused – Angry Lot Owner"

Pradella's communication (and that off their onsite managers, Central Apartments, controlled by Pradella), has been hopeless. And it seems that Pradella has a habit of buying cheap land, and then developing. Low & behold, many Pradella apartments have flooded:

Parklands Sherwood: (from the Pradella website): ""20/01/11: Whilst an amazing effort has been undertaken by Building management, Developer staff, tenants and residents, friends of tenants and residents, volunteers and emergency service staff in progressing the cleanup, much work is still required. Damage to services is still being assessed and whilst we hope power may be restored to some of the areas soon, other services and facilities will take considerable time to return to normal.:

Waters Edge (from the Pradella website): "20/01/11: Whilst significant progress has been made on the cleanup effort, the building is still without power and telecommunications due to the damage to equipment in the basement. All residents and tenants have been evacuated and quite obviously due to power issues, the building is not liveable at this point.

West End Central (from the Pradella website): "21/01/11: The clean up continues and the car park is looking better each day. We are hopeful that the repair of the electrical switchboard will commence next week. 20/01/11: Regretfully little change or positive news from what was reported earlier this week. 18/01/11: Whilst no flooding occurred in the lobby, reception pool area or apartments, the property has still been severely affected.

Encore Toowong: Flooded

Tempo West End: Flooded

Left Bank West End: Flooded

Flow West End: Mildly Flooded

Top End Heading Towards The Bottom

Here is evidence that, despite what real estate agents and developers tell you, the top end apartment market is not going great. Many people have overpaid in the past 4 years.

Apt 80 in Flow, at West End, now listed for $1,850,000. This is a massive 4 bedroom, 3.5 bathrooms, 4 car, riverview penthouse apartment. It is 272 sqm internal, and 370 sqm total floor space. It has been for sale for a while. It went to auction in March 2009 and did not sell. (It was purchased off-the-plan in 2006 for over $2.3M. I think a real estate agent's investment company purchased it, but am not sure. So with stamp duty and interest, a loss over well over half a million bucks!)

By comparison, Apt 23, on a lower floor (3rd floor -- partial river views) - 3 bedrooms, was listed for sale by the developer for $1.4M in November 2007.

Or the same developer, Pradella, was selling apartments off-the-plan in Waters Edge next door in May 2008 which are not as good for $1.9M to $2.2M (these are A1 and A2 apartments, 159 sqm, 3 bedrooms).

So you can see that prices being paid for expensive apartments have not held up. (Flow and Waters Edge and Riverpoint are not the greatest locations, looking west, in a semi-industrial area a long walk from any facilities. Infrastructure touted by developers 4 years ago has not arrived.)

If Flow has been a bad investment for some, what about a $4.5M capital loss. See this story.

Riverpoint Auction - No Result

A new Riverpoint apartment at West End failed to sell at a high profile Ray White auction. The highest bid was $3.5M. This is less than $4000 a sqm.

This apartment is back from the river, with terrace houses and a pool between the apartment building and the river. See Auction video.

Montague West End Pricing

Montague at West End is currently in pre-sales. Here are some example prices:

Level 11 (top floor) - 1 bedroom 1 car

Area: 69sqm total (53 sqm internal) plus balcony. The bedroom in internal with no windows. Kitchen is in hallway (galley kitchen). No laundry. Small -- keep in mind that a typical dulux hotel room is about 40 sqm.

Price $400,000

North facing with views

Similar floor plan on ground floor with courtyard

Total Area: 70sqm

Price $360,000

But there are even smaller apartments than this!

For example, a 1 bed 1 car apartment on level 2 is listed at $315,000

Area 48 sqm internal plus 6 sqm balcony for a grand total of 54sqm. This is a room, not an apartment!

A larger apartment, 1 bedroom, on level 8 is listed at $420,000.

This is 57 sqm internal, plus 20 sqm balcony, for a total of 77 sqm. The laundry is on the balcony.

Station 16 - South Brisbane

A new development from Aria, at West End is Station 16. Located at 16 Merivale Street, close to the off-ramp for the new Go Between Bridge. 60 apartments in total. One bedrooms from $335,000. Two bedrooms from $485,000.

"Station 16, offering 36 two bedroom apartments (including 5 Dual Key options) across 10 levels will take advantage of South Brisbane’s existing and future $4 billion infrastructure spend with the added benefit of an anticipated settlement date in 2012. The functional, contemporary, architecturally designed apartments that include European appliances tick all the boxes for the astute investor. With a selection of apartments boasting north-east facing aspect that provide outstanding Brisbane CBD views, you will want to be one of the first to secure your piece of Brisbane’s future."

West End - Montague

"...a limited opportunity to buy from the first round price list - elevated 1 bedroom apartments with secure basement car park from $315,000 and large 2 bedroom north and south facing apartments with sweeping views and secure basement car park from $560,000. These prices in West End represent undeniable value and it has been many years since we have seen this quality in an inner city project at such attractive prices. "

West End - Montague - from agent's email

• BUZZING WEST END RIVERSIDE LOCATION
• INSPIRED DESIGN BY INTERNATIONALLY RESPECTED COTTEE PARKER ARCHITECTS
• RIVER, CITY AND PARK VIEWS
• LUSH, SUB-TROPICAL LANDSCAPED CENTRAL PLAZA
• LAP POOL, GYMNASIUM, RESIDENT REST & RELAXATION SPACES ON ALL ROOF TOPS

Waters Edge Update

There are some good photos of the construction of Waters Edge on the developer's website. The developer is currently advertising an X type apartment "from $645,000". This is a one bedroom apartment, with an internal study or second bedroom (no external windows).

Ferry Road, West End

On Wednesday, 5 May 2010, the Australian Financial Review had an advertisement of page 7 for 51 Ferry Road, West End. Jones Lang LaSalle is marketing the property for sale, as a 6,381 sqm riverfront site, with major development potential. Expressions of interest closing 3 June.

This would be a worry for purchasers in Waters Edge, because this is the neighbouring site, and many of the apartments look directly into this site. It may also impact the cheap apartments built on Ferry Road.

Flood Maps

It is interesting to look at flood maps of Brisbane. You can see, for example, that SL8 is in a flood zone. Newstead River Park is an overland flow zone.

Extract from Recent Matusik Email

Australian Property Monitors (APM) – a fully owned subsidiary of Fairfax Media – last month published a study which outlined what houses across Queensland (and by suburb) could be worth in three, five and ten years’ time. Needless to say, the projected growth trajectory is almost exponential, rising on average by 11% per annum across Queensland over the next decade. Prices rose by 11.7% each year, across Brisbane for example, during the noughties. Hopefully, APM did more work than just assume that the past will be repeated. But one wonders.

A check on 25 randomly selected Queensland suburbs finds a pretty consistent projected growth pattern, with values expected to rise by 30% in the next three years, then by just 10% between year four and five and then by a whopping 115% between the sixth and tenth year. By 2020, just short of 600 Queensland suburbs are expected to enjoy a median price over $1 million; and 54 areas could be, on average, priced over $2 million. The median Brisbane house price, today, is around $440,000.

What is driving the growth in five years’ time? Why does the growth rate plummet in year four? Surely there is something more than just “demand exceeding supply and strong economic growth, particularly in resources,” as quoted in the accompanying media commentary. Please APM, explain to us your methodology, as it is absent from the published forecasts.

Also puzzling is why Hamilton’s house values are expected to drop 20% over the next three years, whilst neighbouring Ascot’s prices are forecast to rise by 7% over the same period. And why just 7% – isn’t Ascot (and Hamilton for that matter) in a prime spot, with heaps of infrastructure support? Similarly, South Brisbane’s values are to drop by 8% by 2012, but West End’s values will rise by a staggering 33% or $236,000. Ditto for Surfers Paradise, down 36% in three years, versus a projected 20% jump for adjacent Broadbeach. I could go on and on. Please, APM, explain these anomalies as well.

The Gold Coast market, and in particular Surfers Paradise, has been getting a caning of late. According to the latest Queensland government valuations issued in March, ocean-front land has fallen by 30% on the coast, with residential values down 18% in Surfers Paradise since 2007, when land was last valued on the Gold Coast. According to a recent study by the REIQ, median dwelling prices in Surfers Paradise dropped by 30% during 2009.

Now there is no question that the Gold Coast is doing it tougher than the rest, with our data – which is based on cleaned up resales – showing that apartment values fell 9% during 2008 and a further 4% last year. But ocean-front apartment values – in Surfers Paradise at least – and again based on individual resale analysis, actually rose last year. Up by 8.9%!

There are two messages here. Firstly, in order to get a true handle on the residential market it pays dividends to narrow down the sample set and investigate individual resales. Sweeping statements – and especially based on suburb, or worse still, postcode analysis – are nearly always incorrect.

The second message comes in the form of a question. Why does the media (and too many punters, as well) accept these forecasts as if they are gospel? I understand why the Fairfax Media might, but the Murdoch Press? Maybe digging around a bit is too much work for journos these days. A recent study commissioned by crikey.com suggests this is the case, with nearly 55% of the stories published across ten major Australian newspapers late last year being driven by media releases or public relations firms.

So what do I think prices will do over the next decade? In short, my answer is…not as much as they did over the last ten years.

Dwellings are overpriced but not (yet, anyway) oversupplied. The current “boom” is likely to run out of puff within the next twelve months, on the back of rising interest rates and declining affordability. We could “crash and burn” like the US recently did or go through a long, drawn-out adjustment, as happened in the 1990s. The latter means that residential values will be flat until affordability is rebuilt by a combination of gradual increases in household incomes and cyclical declines in interest rates. Given this scenario, growth over 5% per annum would be a strong result.

It’s back to the future, if you ask me.

Source: www.matusik.com.au

Promised Infrastructure

I often visit off-the-plan sales offices for apartment projects, and I am often told about planned infrastructure. A new pedestrian bridge, or a new CityCat ferry stop, or a new bus route, or a new supermarket planned for a neighbouring or nearby site, or restaurants about to open. I go back a number of years later, and the planned infrastructure is still not there.

Sales agents often talk about stuff that will improve the area but that never actually eventuates. So be careful about such "promises". It is best to look at what the area is like now, because this is how the area may look for some time to come. Do not pay extra for future benefits that may never arrive. If they do arrive, then you will get some capital appreciation.

I walked around West End last night. A Saturday night. Boundary Street was alive and hoping. South Bank was busy and bustling. Montague Road was dead. It was dark and no people were around. Nothing was open. It is still a scary semi-industrial area. So be careful if buying into Flow, or Waters Edge, or Koko or Riverpoint. There is a lack of public transport, and it is a very isolated area. I would not walk home from the city at night to Flow or Riverpoint. The promises made by sales agents to me a number of years ago (new park, CityCat terminal, new coffee shops and restaurants opening, a new supermarket on Montague Road, a new bus route with regular buses for all the new residents) just did not eventuate. Still many light industrial uses and sheds for spray painters.

Wave or Montague West End

Some more details about Wave West End which may have been renamed Montague.

See Development website. It is located behind Stockland's Koko.

Riverpoint West End

Riverpoint at West End, stage one, is complete and owners are starting to move in. It would be interesting to know how many of the valuations came below contract price, and how many purchasers off the plan were unable to settle.

Riverpoint, stage one, still has apartments listed for sale. These include:

• a "two bed one bath" (67sqm internal, so small!) where the second bedroom is internal with no windows, listed at $580,000.
• a "three bed two bath" (81 sqm internal, which is in my view too small for a 2 bedroom apartment) with views of one of the other buildings, listed at $750,000.

I laugh that an agent has a 2 bed 1 bath listed for resale, at $550,000, giving the total area as 116sqm -- but this includes 17sqm of car park. Most other developers and agents do not include the carpark in the sqm area when selling an apartment, so take care!

I have inspected Riverpoint. The general quality looks to be very good. Some of the apartments are too small, in my opinion, and have bad aspects. The prices are high. There are many more stages of Riverpoint to come, so extreme care must be taken.

A West End Love Story, in Brisbane

There is a very fancy website for Montague at West End. It is located behind Stockland's Koko.

See http://montaguebrisbane.com.au/. I think this was once called "The Wave". The development has a large number of very small apartments. Pricing starting from $290,000. Developed by Mirae Queensland Pty Ltd.

Inner City Rents in Brisbane

"Tenants in West End and Kangaroo Point are paying up to 40 per cent more in rent than this time last year, as more people eye off luxury living in the inner-city.

As the phasing out of the first home-buyers grant buoys the rental market in Brisbane, premium apartment developments have pushed rental prices higher in the inner-city, according RP Data research analyst Cameron Kusher."

See Brisbane Times

Misleading Advertisement for Riverpoint Apartment

A reader forwarded me an interesting email chain with an agent, about this advertisement for resale of an off-the-plan apartment in Riverpoint in West End.

The apartment a 2 bedroom, 1 bathroom apartment, which has an internal size of 66sqm. This is very small for a 2 bedroom apartment. The second bedroom is not large enough for a queen bed and has no windows and has a sliding door because the room is too small to have a normal swinging door. The kitchen comprises benches along the wall.

This is the advertisement. Some text: "On Offer in Stage 1 of The Riverpoint Development is An Affordable Lifestyle Apartment On The First Floor, 94m2 of total Area, with 2 Large Bedrooms, 1 Bathroom & Upgraded Finishes." Two large bedrooms, who is this agent kidding?

But the real issue is the drawing included, as shown above.

The floorplan shows a tiny bathroom with a shower only. However, the drawing included in the advertisement shows a large bathroom with a bath and a shower.

When this was brought to the attention of the agent, Michael Mangelakis, of Street Property Sales, he replied in an email

"The artist impression of the bathroom has been used in an indicative manner to present the type of finish being supplied at completion." and then in a follow up email, Mr Mangelakis says: "You obviously have not looked at the photo’s properly. They are all marked with “indicative only”. I think you need to stop wasting my time. Goodbye"

The advertisement is clearly misleading -- showing a drawing of a bathroom from another apartment, and saying it is indicative of the finishes, where it is not indicative of the size, layout or features. The text of the advertisement does not make this clear at all. It is clearly misleading and deceptive. I would not want to buy or sell though this agent!