in liquidation: M on Mary

"RECEIVERS & MANAGERS APPOINTED IN LIQUIDATION. BRAND NEW APARTMENTS. INVEST TODAY FROM JUST $295,000 IN THE HEART OF BRISBANE, AUSTRALIAS MOST EXCITING AND LIVEABLE CITY. PLUS A RENTAL GUARANTEE OF 6.5% GROSS (avg) MANGEMENTS FEES INCLUDED."

It appears that a Gold Coast company has been appointed to off load what remains for sale in M on Mary serviced (non residential) apartments. This building has 1 bedroom apartments, with some 3 bedroom apartments on higher floors. About 400 apartments in total, with over 100 reported as unsold. A very poor pool area. Most don't have car parks. Small apartments. Avoid!

Which Buildings Have More Owner Residents?

The Brisbane City Council has released a list (in relation to rate increases) that includes the number of owner occupied apartments in Brisbane apartment buildings. The full list is here. My view is that the higher number of owner occupiers in a building, the better the investment in that building.

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%

Prices Still Increasing

From RP Data's Property Pulse:
"Brisbane
Across the 12 months to August 2008, Brisbane’s median house value has increased by $21,915 although, the level of vendor discounting has also increased by 3.64%. Given this, vendors who sold in August 2008 would be $6,328 better off than if they sold at the same time last year. Brisbane’s median unit value rose by $11,966 across the year to August 2008, meanwhile an increase in the level of vendor discounting of 3.09% has meant that a Brisbane vendor selling at the median unit value would have been $2,410 better off selling this year as opposed to selling at the median value last year"

Vision Suspended

"PLANS for Brisbane's tallest tower appear to be crumbling with builders told yesterday the contract for works on the Vision tower had been suspended. Builder Grocon told workers at the Mary St site yesterday that the main works contract had been suspended by the developer, Austcorp. Last week an Austcorp spokes-man said the $950 million, 287m Vision was a live project and it would be Built. Austcorp head Trevor Chappell was overseas yesterday and un-able to be contacted to confirm the suspension" Source: Courier Mail.

Rates Ripoff in Brisbane

CITY Hall will drag five times the amount of general rates out of Kelvin Grove Urban Village this financial year.
Information released by Brisbane City Council after a question with notice shows some inner city buildings will collectively pour 400 per cent more in general rates in to the city’s coffers than last year, with Kelvin Grove Urban Village facing the biggest rise. The Village’s 213 unit owners paid a total $83,411 in general rates to council in the previous financial year, the information shows. But this will jump to $443,750 for the 2008/09 financial year after changes are introduced in January, designed to increase rates for some of the city’s most expensive inner city apartments. The changes, which take effect in January, will lift the general rate for the average unit owner in the Village from $392 last financial year to about $2100 for this financial year. But just a fraction of those living in the Village are owner-occupiers, meaning all but 23 units are owned by investors.
Other addresses to be hard hit by the new ``parity scheme’’ include the Parkland Boulevard building in Brisbane’s CBD, which will collectively pay 364 per cent more in general rates than last year, increasing the building’s total contribution to $753,000. The building contains 168 owner occupied units and 232 investment units.
Council will collect 300 per cent more in general rates for the year from Riverplace Apartments in Brisbane, where 76 of the building’s 314 units are owner occupied.
Owners of units in Admiralty Towers II in Queen Street will fork out 310 per cent more than last financial year.
Riverscape West unit owners in MacDonald St, Kangaroo Point, face an increase of 150 per cent over last financial year.
The information shows just under 1000 owners of units in 116 inner-city apartment blocks will together boost council’s kitty by $6.3 million this financial year under the changes, representing a 127 per cent overall increase for the addresses.
Central ward Councillor David Hinchliffe (Labor) said the changes would take a toll on residents of Kelvin Grove’s Urban Village, which he said was ``not the most salubrious address.’’ Cr Hinchliffe said the impact on unit owners would be about an 800 per cent increase from one quarter’s rates bill to the next.
But council Finance chairman Adrian Schrinner said the information put to rest once and for all claims people were facing 1000 per cent rises in their rates bills. He reiterated a previous commitment to issue letters to unit owners showing the individual increases they face ahead of the January changes.
See City News

Soleil Tower Sales Launched Today

Meriton's Soleil, its first building in Brisbane, launches this weekend. (Completion of the building is planned for 2011 or 2012.)

It will be 74 levels, and 234 metres high, located at the end of Adelaide Street, behind Skyline and next door to Macrossan (which is under construction).

Floors 31 to 64 contain the apartments that Meriton will sell. Floors 65 to 74, comprising 42 apartments, are not for sale. Floors 30 and below will probably be 175 serviced apartments, owned and managed by Meriton. A total of 188 apartments will go on sale this weekend. They are 1 to 3 bedroom apartments. The 2 and 3 bed apartments have 2 bathrooms, and an underground carpark (up to 10 levels below Adelaide Street level).

On the higher floors (above level 41), there are five apartments per floor. There are 3 elevators for about 220 apartments, which is not a great ratio. (Admiralty Two, just nearby, has 191 apartments and six elevators.)

None of the apartments have balconies. Airconditioned, full length windows, and floor to ceiling tiles in the bathroom. Indoor pool and gym.

Here are some example two bed, two bath apartments:

Apartment 6001, level 60, views south down the Brisbane River over the top of Skyline, 79 sqm and 1 car park. Listed for sale at $823,000, which is about $10,400 a sqm.

Apartment 4205, level 42, limited views between Admiralty Quays and River Place, but good views over All Hallows, 83 sqm and 1 car park. Listed for sale at $672,000, which is just over $8,000 per sqm.

Apartment 5204, level 52, views over Admiralty Quays, 78 sqm and 1 carpark. Listed for sale at $688,000, which is just over $8,800 a sqm.

Compare existing, older stock of 2 and 3 bedroom apartments nearby:

• Admiralty Two, Level 4, direct riverfront, 103 sqm (including balconey), listed at $720,000
• Skyline, Level 27, river views, 102 sqm (including balconey), fully furnished, listed at $720,000
• Admiralty One, Level 18, direct riverfront, 3 bedrooms, 2 carparks, 150 sqm, listed at $880,000.
• Quay West, Level 16, river and park views, 120 sqm, listed at $850,000
• River Place, Level 13, direct riverfront, 116 sqm listed at $675,000 or $675,000

From what I can tell, the current actual sales price for direct riverfront apartments in the city is between $6000 and $7000 a sqm.

Overall, Soleil is in a great location, the floor plans seem to be well designed, and Meriton will deliver. Care should be taken when selecting, as some apartments will not have great views due to neighbouring buildings -- but some apartments should have great views (if you like heights!). The apartments are a little small for my liking, and I am not sure about lack of balconey.

M on Mary - bank takes over?

I heard that the developer of M on Mary has gone into bankruptcy or receivership. There are a number of apartments that remain to be sold. Unfortunately, I have no other details at this time.

Meriton Soleil Pricing

Apartments for Sale

Size	Parking	Priced from	Floorplans
1 Bedroom		$348,000
2 Bedroom	1 Car space	$503,000
2 Bedroom + Study	1 Car space	$587,000
3 Bedroom	1 Car space	$876,000

Prices as at 21 October 2008.

Ray White Sunday Auction Results

See Courier Mail blog

• Felix: 342/26 Felix St, 2 bed, 2 bath, sold for $495,000.
• Festival Towers, 1901/108 Albert St, passed in $450,000
• Festival Towers, 3508/108 Albert St sold prior to auction, reported at $555,000 or $445,000??
  
• Charlotte Towers, 1502/128 Charlotte St, 2 bed 2 bath, passed in on vendor’s bid of $420,000
• River Place River Terrace House: 1/82 Boundary St was passed in at $1.35 million, now listed at $1.5M
• Skyline, 12/30 Macrossan St, three bedroom unit passed in at $900,000, now listed at $1,240,000
  
• Aurora Tower Penthouse: 651 and 656/420 Queen St passed in at $2.4 million, now listed at $2.6M
  
• Soho, 416/8 Cordelia St, 1 bed, South Brisbane was passed in at $280,000
• SoHo, 615/8 Cordelia St was passed in for $465,000, looking for offers above $500,000
  
• SoHo, 108/8 Cordelia St passed in at $505,000
• Euro, 1308-2-6 Manning St, South Brisbane, 2 bed 2 bath, passed in at $400,000
• Trilogy, 336/51 Hope Street, Spring Hill, 2 bed, 2 bath passed in at $540,000, sold after for $550,000 (vendor was off the plan owner who had paid $595,000)
  
• Stradbroke Tower, 74/2 Goodwin St, Kangaroo Point passed in at $875,000
• 1/24 Brisbane Street, St Lucia, sold for $414,000
• 6/211 Baroona Rd Paddington, 2 bed, 1 bath, sold for $431,000
• LeftBank, 64/35 Buchanan St, West End, passed in at $1.15 million

"Hundreds turned out to the convention centre on Sunday to see 80 properties offered for sale as part of the Ray White Property Auction Spectacular. There was a wide range of units and houses was on offer but properties sold under the hammer for prices well below what would have been expected six months ago.
Chief auctioneer Philip Parker said he pleased with the lacklustre clearance rate of almost 30 percent but said those who sold at auction realised they were not going to get what they thought their property was worth before the economic downturn. He said while no-one was happy with the current economic climate, sellers realised if they wanted to move a property they had to meet the market.
``Out of those that sold today, only one buyer didn’t go down on their original (minimum) price,’’ Mr Parker said.
He said the vendors who didn’t budge, didn’t get a sale. Negotiations are continuing on several properties offered for sale." http://blogs.news.com.au/couriermail/publicproperty/index.php

Meriton Soleil to be Released Soon

"Thank you for your email enquiry regarding our brand new 1, 2 and 3 bedroom apartments soon to be on sale. Selling off the plan the development is expected to be completed 2011/2012. We will be selling this development at the end of October or early November at our Display Centre at 488 Queen Street, Brisbane."

United States House Prices Far from Bottom

"One reliable proxy of housing values — the ratio of home prices to rents — indicates that in many cities prices are still too high relative to historical norms. In Miami, for instance, home prices are about 22 times annual rents, according to analysis by Moody’s Economy.com. The average figure for the last 20 years is just 15 times annual rents. The difference between those two numbers suggests that a home valued at $500,000 today might be worth only $341,000 based on the long-term relationship between prices and rents."

NY Times

No More NorthBank

The Premier axed the NorthBank development on the edge of the Brisbane CBD.

See Sunday Mail - it was front page news.

People in Casino Towers and the west side of Quay West are happy no doubt.

Doubtful Vision

"The developer behind the $900 million Vision Tower skyscraper on Mary Street is confident construction will proceed, despite the global credit crisis and economic uncertainty. Austcorp's ambitious 79-storey building will be the tallest in Brisbane when complete and is tipped to become an icon of the city's burgeoning growth. However, doubt has been raised over the likelihood of construction, following last week's collapse of the high-profile Empire Square development on Elizabeth Street that was sparked by the worsening world economic climate.

Industry sources told brisbanetimes.com.au a contingency plan had been devised if finance, which had been arranged but not officially confirmed, was to fall through.

Excavation of the building's basement-level car park is underway, but that could be as far as Vision gets if the credit crisis prohibits Austcorp's financial backing. The developer could sit on the site and operate it as a public car park until things improved, one source said.

However, Austcorp spokesman Terry Lee rejected the suggestion that Vision was in doubt, and said plans remained very much on track. "We have funding commitments (and) we are still working with the banks to finalise that documentation ... it will take time for us to do that," Mr Lee said.

"This is a normal process that all development projects go through."

Mr Lee acknowledged the turmoil in the global market, but would not be drawn on whether it posed a risk to the development.

"I know there are various rumours circulating in the market, there has always been talk about Vision one way or the other," he said. "We are progressing as we planned ... I don't want to be drawn on market speculation."

He would not comment on the possibility Vision would be delayed by the on-going credit crisis.

Austcorp had secured more than $12 million in apartment sales in the last quarter, which meant about 70 per cent of residences were now pre-sold with unconditional contracts. "Total apartment sales amount to $260 million ... Vision will ride out the current market turmoil to become Brisbane's landmark building when delivered in three to four years' time."

See Brisbane Times

Riverpoint Update

Riverpoint reports that it has reconfigured some of their apartment layouts:

"... we are about to release a whole new range of designs, in response to public demand. They incorporate a range of 2 bedroom, 2 bathroom apartments, 3 bedrooms apartments and Sub Penthouses. These stunning new designs will be released to the Brisbane Property Market on Saturday the 25th of October."

"The new Super Penthouse will be built over floors 7 and 8 of Mosaic [note: this is not a direct riverfront building] and will raise the level of riverfront living to unexpected heights, in this rapidly evolving prestige location. The Super Penthouse will be spread over 700m² of exceptional living. It will also incorporate a 70m² ballroom/entertaining space on the 7th floor, complete with its own private lift to level 8 – The Owners Enclave."

West End Unit Owners are Concerned

"WEST END: Riverside apartment dwellers are banding together in a bid to give their direction on the future shape of the community. More than 30 residents from the Flow, Koko, Leftbank and Tempo complexes have met to discuss the need to build a sense of community in the area. Regatta Apartments body corporate chairman Paul Rees said they hoped to build a liveable community, not only for apartment dwellers but the whole of West End.

“We’re planning a series of regular events to build community in our area and the first event will be a breakfast in Riverside Park on Sunday, December 7 at 9am,” Mr Rees said.

He said they invited local, state and federal representatives as well as community groups and property developers to attend the breakfast to hear their ideas. Among residents’ concerns are building heights, closing Riverside Drive to public traffic and fast-tracking plans for a CityCat terminal. And Mr Rees said residents felt they were not consulted about increasing building heights.

“We are appalled at the suggestions of 15, 20 and 30-storey highrises being built here,” he said.

“We moved into this area believing the height limit would be seven storeys and we don’t want to see our area turned into a concrete jungle,” Mr Rees said.

He said a CityCat terminal and a reliable bus service on Montague Rd were important to give residents adequate public transport. Mr Rees said they supported redevelopment of the old riverside industrial areas as long as it was on a “human scale” and integrated with the established community of West End, “rather than creating a concrete barrier between West End and the river”."

See City South News

River City and Oaks - Again!

I saw this on a bulletin board:

"Remember the controversy of kicking all those tenants out of Charlotte Towers??? Well... guess what... its happening again, but with River City.

The Oaks has send letters to all of their tenants telling them that they must leave because their apartments will be turned into short term accom... BUT... and thats a big but because the Oaks as NOT INFORMED any of the owners that they are kicking out tenants so that they can convince owners that they could get more money from short term accommodation."

See this post.

I would be careful and do a complete due diligence before buying in an apartment in a building managed by Oaks.

Predictions and Guesses

A lot of people seem to think that it is the end of the world as far as property investment is concerned. These are my thoughts.

Facts:

• Interest rates are going down
• There is low unemployment in Queensland
  
• There are few vacant rental properties, and rents are still increasing in Brisbane
  
• According to REIQ and RP Data, medium prices have fallen less than 3% in the past 6 months, and over the past year prices have still increased
  
• Property is still selling. For example, a three bedroom apartment is Admiralty One sold in less than a week. At auctions in Mooloolaba this weekend, which has been a tough market, there were 2 two bedroom apartments that had bids of more than $1 million: Oceans 503 had a highest bid of $1,200,000; and Sirocco 604 had a highest bid of $1M.
• Banks are still lending money, but they have tighter lending requirements
• For most of Brisbane, there are very few delinquencies.
  
• In outlying areas (such as Forest Lakes and Springfield) and low quality bulk highrise marketed to investors (e.g., Charlotte Towers, and other recent Devine buildings), there are distressed sellers who are selling for less than they paid.
  

Assumptions:

• Matusik, who is a very bullish property consultant, has the following assumptions in most of his presentations, but I am not sure how many of them will turn out to be correct (and some from his September 2008 presentation are already wrong):
• interest rates to drop by 0.5% in fiscal 2009
• $A remains high – above 85 US cents
• migration to oz remains high US economy has a mild recession, mild recovery in 2009
• demand for our resources continues
• share market settles down unemployment remains below 5% and wages growth remains constrained

Opinion and Predictions (Guesses?)

• Property in inner Brisbane will take longer to sell than over the past 3 years (e.g., time on market will return to a more normal period of time, from 15 days to 30 or 40 days).
• Prices for poor quality apartments will fall by 25%
• Prices for apartments that have their views destroyed (e.g., Charlotte Towers, 212 Margaret, River City, and some in South Brisbane) will fall by 25%
• Prices for apartments without carparks will fall
• Some new apartments for off-the-plan developments) are priced too high for what they are, and will have difficulties selling in the short term (e.g. Waters Edge, Empire Square, Vision)
• Anything priced over $6,000 per sqm will struggle to sell, unless it is really special
• Off the plan developments will not sell well until completion -- in uncertain times, people do not want to make bets on the future, especially where the product being sold is intangible -- people want to touch and feel in uncertain times.
  
• Really good stuff will sell, and will not reduce in price by more than 5% (if at all)
• In February 2009, the market will pick up, but will not have growth of more than 10% per year for at least two years
• Due to lack of building today, things will get better for investors in good locations in the short term
• This year, my property portfolio looks better than may stock portfolio.

Future Brisbane Apartment Developments

There is likely to be a shortage of apartments in Brisbane in the near future. (This statement assumes that that is not massive unemployment in Brisbane.) There are few developments under construction, and so very little new stock will come onto the market in the next three years. What new stock remains unsold is either overpriced or poor quality.

Downtown Apartments

• M on Mary - completed - mostly poor quality 1 bedroom apartments, mostly unsold. Developer has ceased sales campaign and is running this building as short term accommodation
• Evolution - completed - about 20 apartments unsold - small and overpriced
• Skyline - completed - about 20 apartments unsold - building surrounded by other buildings, and generally overpriced
• Aurora - completed
  
• Empire Square - cancelled
• Trilogy Tower - status uncertain - in presales, with planned completion in 2012 - both hotel rooms and expensive apartments
• Vision - status uncertain - in presales, with completion not before 2012
  
• Soleil Tower - soon to start presales - 403 apartments, with completion about 2011
• French Quarter - early days, no planning approval
  

Inner City

• Flow (West End) - completed - about 5 remain unsold, will negotiate on price to sell
  
• Koko (West End) - completed - about 5 remain unsold, will negotiate on price to sell
• Tempo (West End) - completed - about 5 remain unsold, will negotiate on price to sell
• IceWorks (Paddington) - almost complete - about 6 apartments remain unsold
  
• SL8 (West End) - under construction, with completion expected in April 2009, poor location
• Waters Edge (West End) - off-the-plan selling, overpriced and selling poorly, completion in 2010
• Ciana (Indooroopilly) - almost complete - about 25 out of 130 apartments remain unsold - good value
  
• Tennyson Reach - 2 buildings nearing completion, 1 building not far behind, 3 more buildings planned
• Newstead Waterfront - 2 buildings selling well off-the-plan
• The Mill at Albion - almost sold out, relatively expensive
• El Dorado Village - to be launched to the marketing in October 2008, completion likely in 2011
• Milton Union - received planning approval

Useful Websites About Brisbane Apartments

When I am looking for information about Brisbane apartments under construction, I find useful information on the following two websites:

• SkyScraper Life Forum
• Skyscraper City
  

Chermside

I have never been excited about Chermside. However, here are some links to Chermside apartment buildings:

• C1 Apartments and also here and here
  
• Quest Chermside
• The Chermside
• Equinox
• Park Lane (and also here) - due for completion in December 2008
  
• HQ Apartments
• The Edge
• Central Park North and here
  
• Chermside Central and here

Soleil Tower Website

Meriton's Soleil Tower, on Adelaide Street, now has a website. 403 apartments. 74 levels

See http://www.meriton.com.au/default.asp?action=article&ID=92705

Fall of an Empire

The Empire Square project on Elizabeth Street in Brisbane, which was to include a Westin Hotel, has been scrapped.

"Developer Metacorp is today in the process of advising investors it will not proceed with the development because it has lost financial backing, sources have told brisbanetimes.com.au. The empty retail stores on the site of the planned development have been readvertised for lease."

It was reported that a large number of the 100 apartments had sold off the plan. The minimum price was $1.3M for a 2 bed apartment.

See Brisbane Times.

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.

See http://www.rpdata.com/news/rp/20081001_media.html

Water's Edge at West End - Traffic Concerns

Brisbane apartment project dismisses transport concerns

The company behind a new apartment complex in Brisbane's West End says it does not think the project will worsen local traffic flow. The old box cardboard factory near the Brisbane River will be replaced by 220 apartments. There will be two eight-storey towers built on the site.

Ross Higgins from Pradella Developments says it should attract more transport infrastructure to the area.

"West End's undergoing a major infrastructure redevelopment from a traffic point of view now," he said.

"And really what we're doing is replacing a lot of people that were working in the area anyway.

"I don't believe it'll have a negative effect on transport in fact I think that it'll bring more transport infrastructure to the area."

Source: ABC News

In fact, there are plans for more than two buildings on the site -- with two or three buildings planned for the other side of Duncan Street as well, as shown on the map on the project website.

See also Brisbane Times

Brisbane Association for Rates Equity

There is now an association of apartment owners that is fighting the Brisbane rate increases for apartments. It is called Brisbane Association for Rates Equity, or BARE.

See www.brisbaneratesrort.com
and
http://brisbaneratesrort.blogspot.com/

Buranda High Rise Development

See Brisbane Times

"Thousands of new residents, workers and shoppers could soon flood the inner-city suburb of Buranda if a large-scale urban village, featuring buildings up to 32 storeys high, is approved by Brisbane City Council. The Anthony John Group (AJG) this week lodged an application to transform a parcel of former industrial land on Logan Road, south of the city, into a mega-development. Dubbed Buranda Village, the site would be home to eight buildings comprising residential apartments, office space, a hotel, a cinema complex and sprawling retail outlets."

I was not impressed by Anthony Johns Group's apartment development in the Valley, the Emporium -- built between two main roads, the apartments either look at a car park or a main road. Small apartments and noisy. My guess is that this will be much of the same

Parklands at Sherwood Residential Development

I recently visited the Parklands at Sherwood development, by Pradella. It is currently under construction, with stage one completion planned for this year.

When complete, the development will have 239 residential dwellings - a mixture of houses, townhouses and apartments. They all share a pool, gym and resident's meeting room. For this post, I will focus on the apartments.

Stage One consists of 28 apartments, over two floors. There is a mixture of 1, 2 and 3 bedroom apartments. Half the apartments face the park, and half face the town houses.

Stage Two consists of 54 apartments, over three floors. Again, a mixture of 1, 2 and 3 bedroom apartments. Half the apartments face the park, and half face the "village green".

All apartments have air conditioning, and elevator access to 2 car park spaces in the basement.

The sizes of the apartments are typical. For example:

• larger: 2 bedrooms, 2 bathrooms, 1 study nook = 91 internal and 30 external = 121 sqm
  
• medium: 2 bedrooms, 2 bathrooms, 1 study room = 88 internal and 22 external = 110 sqm
• smaller: 2 bedrooms, 2 bathrooms = 83 internal and 14 external = 97 sqm
  

The larger apartment listed above is an end apartment, and so has good light from two sides. The living area has over 5 metres of glass sliding doors. The ensuite has both a bath and shower. There is a separate laundry. The bedrooms are well separated, and the second bedroom is near the bathroom.

For the medium apartment listed above, both bedrooms have views. The bedrooms are well separated, and the second bedroom is near the bathroom. The ensuite has both a bath and a shower. The separate study room is a real room (but with no windows) -- it is large enough to be a nursery, guest bedroom or media room.

The best thing about the development are the views from the parkside apartments. You just see green parklands for miles. The apartments are built on a hill, facing north and north east. They are up high, so even the lower floor has views. There is park immediately in front, then Oxley Creek, the Brisbane River and Indooroopilly Golf course. From the second floor apartments you can see city buildings -- I could see the clock on the Suncorp building. Great aspect, views and breezes. I really had low expectations, but was blown away by the views. And they can never be built out.

This development will be unique in the Sherwood / Graceville / Chemler area. It is well located, near the Sherwood State School, and walking distance to Woolworths in the Sherwood village, and the railway station at Sherwood. Here is a link to an area map.

In stages one and two, most of the 2 bedroom parkview apartments have sold. There are no one bedrooms that have park views. All of the 3 bedrooms have parkviews, and most of these have not sold. Price ranges are below, and when compared to FKP's development at Albion, these prices look like bargains for what you are getting:

1 bedoom apartment	2 bedroom apartment	3 bedroom apartment
$399,000 - $439,000AUD	$560,000 - $609,000AUD	$735,000 - $789,000AUD

SouthPoint Residences at SouthBank

Here is an interesting drawing, showing the proposed building at Southbank, with the existing Collins Place building left standing.

Landmark Byte Brisbane Residential Report

"After recording the strongest growth and activity for the last five years during 2007, the Brisbane residential market like other markets across the country has entered a period of softening. Although key fundamentals of the market including limited housing stock and land supply, record low unemployment and continued growth in population remain solid, other factors such as affordability, high interest rates, declining consumer sentiment and volatility in equities and credit markets have produced a greater impact on the overall market."

"LandMark White expects the Brisbane residential market could fall by up to a further 5% in the next six to twelve months. We anticipate the landing will be quite soft across most market sectors due to the strong fundamentals in the Brisbane market including population growth, under supply of housing and a strong rental market however there is a risk the market may get worse rather than better. This appears to be very much dependent upon overseas issues and a slowing global economy. In the medium term, the only prospect of a change in the market is for the Reserve Bank to soften interest rates further. This now seems more possible however there is a perception that as interest rates fall further, the price growth seen over 2007 will return. This optimism may prove to be unfounded with buyers more likely being more aware of the negative implications of such a price growth cycle and issues of affordability."

See full report.

Vision or not?

See this AFR story, which says that Vision does not have finance and no construction contract has been signed. Trilogy sounds more optimistic. It reports that 74 out of 192 hotel apartments have been sold. The Westin Empire Square -- hard to tell what is actually happening -- sales are good, but no finance yet.

Trilogy and Water's Edge Video

See this video.

A similar story from the Brisbane Times, which is a little misleading because presales have been going on for months:

Brisbane skyscraper nets $50 million in first week
Shannon Molloy | September 19, 2008 - 10:23AM

Investors have swooped on a new mixed-use CBD skyscraper development and snapped up more than 70 hotel suites in less than a week, resulting in a $50 million sales success.

Standing at 265m and boasting residential, hotel and office space, the Trilogy Tower project on Queen Street will be one the city's tallest buildings when complete.

Developer APH Capital caused a stir last weekend when it officially opened sales for its luxury hotel suites, which represent the first new five-star product to be released to the local market in more than a decade.

More than 30 per cent of the hotel component has sold since last weekend, generating at least $50 million.

Brisbane has one of the highest hotel occupancy rates in the world and the hotel market has been bustling with investor activity in recent years.

APH managing director John Wilson said the success at Trilogy highlighted the continuing strength in the market.

"It shows there's a huge awareness of the demand for new hotel room stock and a particular need for five-star rooms in the Brisbane CBD," Mr Wilson said.

"The response to the product has been nothing less than sensational."

Trilogy Hotel, to be managed by Mirvac Hotels and Resorts, will comprise 192 fully-furnished one- and two-bedroom apartment suites.

The rest of the tower will also be home to a luxury residents and an office component featuring 31,000 square metres of space over 28 levels.

Construction is expected to be complete in 2012.

Brisbane Apartment Prices are Not Decreasing

According to the REIQ Unit Report issued today, demonstrates that Brisbane apartment prices are not decreasing.

For Brisbane City downtown area, the median sales price for apartments the 12 months to the end of June 2008 was $451,000, which is an increase of 4.2% over a year. The median sales price for the 3 months to the end of June was $460,000, also an increase over the quarter.

Related story in Courier Mail

Sales and Auction Results for Brisbane Apartments

Felix

• Apt 294 - highest bidder = $395,000

Skyline

• Apt 254 - passed in
• Apt 422 - passed in
  

Riverplace

• Apt 32 - highest bid - $640,000
• Apt 304 - passed in

Aurora

• Apt 583 - highest bid $900,000
• Apt 584 - highest bid $900,000

Casino Towers

• Apt 3104 - sold for $316,000

River City

• Apt 2105 - sold for $375,000

Recent Opinions

Extracts from RP Data's Property Pulse this week:
"With fewer buyers in the market, ABS statistics are highlighting a reluctance by developers to initiate the building of new housing projects. This may be good news for sellers, as the lack of new stock helps to underpin existing market listings with a floor price. Investors should also benefit as population growth and a general housing shortage will likely drive up rents in coming years.

The new figures suggest residential developers are still cautious of soft market conditions despite a fundamental undersupply of residential housing stock. The reluctance from developers to build is understandable: buyers are few and far between at the moment and the number of housing loans continues to fall as credit standards tighten. Adding to the disincentive to build are the ongoing rises in the cost of construction materials and shortage of labour.

The net results of these two factors: low levels of housing construction and strong population growth, are at odds with each other. At the base level we are seeing demand for housing far outstripping supply, and the situation is worsening.

There are two factors flowing from this supply/demand imbalance. Firstly, the undersupply of dwellings places a natural floor under housing prices. This is the fundamental reason why property values have not fallen further in Australia’s major residential markets.

Secondly, the pressure is building on the rental market. Vacancy rates are averaging less than 2% across the nation’s capital cities and rental rates for houses have increased by almost 11% over the last year. We should expect to see rises of a similar magnitude over the coming year.

As property value growth remains sluggish and rental rates continue to power ahead we can expect rental yields to show consistent improvements. For investors the prospects are quite compelling: strong buying conditions and the prospect of improving returns. For renters the news isn't so good – expect further rent rises and more competition for quality rental stock. Now may be the time to consider extended lease arrangements to lock in at today’s prices!"

Landmark White says, in a recent email newsletter:
"LandMark White expects the Brisbane residential market could fall by up to a further 5% in the next six to twelve months. We anticipate the landing will be quite soft across most market sectors due to the strong fundamentals in the Brisbane market including population growth, under supply of housing and a strong rental market however there is a risk the market may get worse rather than better. This appears to be very much dependant upon overseas issues and a slowing global economy. In the medium term, the only prospect of a change in the market is for the Reserve Bank to soften interest rates further. This now seems more possible however there is a perception that as interest rates fall further, the price growth seen over 2007 will return. This optimism may prove to be unfounded with buyers more likely being more aware of the negative implications of such a price growth cycle and issues of affordability."

Milton Union Station Development

"A 30-storey highrise with 210 units, hotel, and a 10 storey office tower over Milton railway station will be built within the next three years after receiving the greenlight from Brisbane City Council."
See Courier Mail
I wonder if the fumes and smoke output from the brewery will impact those living in the apartments?

The article also mentions the Mill at Albion:
"FKP is also building another transit oriented development at Albion, which was approved by the council in April. Mr Miller said so far 120 of the 140 units averaging about $650,000 each had been sold."