``A lot of the apartments that have been bought off the plans say 18 months to two years ago are selling for $100,000 to $200,000 less than people paid for them because there's just an oversupply."
Friday, February 27, 2009
Warning from NZ
Sunday, February 22, 2009
Water Leak in Skyline Apartments
Roma Street Parklands Sale
7041/7 Parkland Boulevard, Brisbane
3 bedrooms, 2 bathrooms, 2 car parks
In 2006, it was listed for sale for $685,000.
Sold at auction on 21 February 2009 for $730,000
Friday, February 20, 2009
Disputes over Body Corporate Fees
See Courier Mail
Oaks Ok
"Mr Pointon said occupancy rates in Oaks's regional properties during January were 80-90 per cent and while its Sydney properties recorded 90 per cent, Melbourne 75 per cent, Adelaide 85 per cent, Brisbane 70 per cent and Auckland 77 per cent."
Source: The AustralianLow Demand for Prestige Homes
"The old belief that because of scarcity these properties would not fall much in this market, while more common housing stock would have bigger losses because of the amount available, has not proved correct. According to RP Data national research director Tim Lawless, this theory held true until recently when margin calls, devalued share portfolios, low company profits and lower than expected executive bonuses brought new conditions to the prestige sector. Now there is simply less discretionary income and lower demand for expensive homes.
"Demand has virtually come to a halt in some inner city areas," Lawless says.
RP Data has a stratified median house price index that divides each market into 10 layers, allowing analysis of different price segments.
In Brisbane, the most expensive tier fell 9 per cent and the least expensive fell 3 per cent.
Because no real improvement in business conditions is in sight, demand for prestige homes will remain relatively low, RP Data says"
Saturday, February 7, 2009
Parklands at Sherwood Completes
Stage One at Pradella's Parkland at Sherwood is now complete. There appear to be some good buys, including a large one bedroom for less than $400,000. There are apartments for rent too. This looks like a great development.
Friday, February 6, 2009
No Sunshine for the Coast
"Among the states, hardest hit appears to be Queensland, where 4000 new apartments are going begging: 1000 on the Sunshine Coast, more than 700 in both Townsville and Cairns, and far more on the Gold Coast. It is believed many of them have fallen into the hands of the financiers, given that most developers make just 20 per cent profit on a project." At least 4000 new apartments are still unsold in Queensland and most of them are believed to have fallen into the hands of their financiers. Bankers are now asking what to do with the properties, and the problem has prompted property experts to run seminars on how to deal with hotel resorts and the unsold million-dollar beachfront apartments that many now control. Mortgagee sales remain prominent on the Gold Coast, where 1383 new high-rise apartments were for sale in the November quarter. Only 37 were sold in the three-month period. That compares with 965 for sale in the November 2007 quarter, when there were 142 new high-rise apartments sold.
Raptis Goes Bust
Saturday, January 31, 2009
Brisbane Rentals
It is rental season in Brisbane, and there is strong competition for apartments. Many people are delaying a buying decision, and so are renting. Some renters have locked in long term leases, taking these apartments off the market for some time. Some investors have put their apartments into a short term letting pool for nightly "hotel" rentals, taking these away from the permanent rental market.
- Ciana Indooroopilly, 2 bedroom rents range from $475 to $600 per week
- Parklands Sherwood, 2 bedrooms from $440 per week; 3 bedrooms from $540 per week,
- Fresh Toowong, 2 bedrooms about $500 to $550 per week
- Admiralty Towers One, which has large apartments
- Arbour on Grey, from $550 per week for a 2 bedroom
- Metro 21, has both furnished and unfurnished, and is not doing short stay rentals so the building is more stable and homely.
Lawsuit Against Council over Brisbane Apartment Rates
BRISBANE unit owners have launched a Supreme Court challenge against the validity of the Brisbane City Council's rating parity factor scheme.
The scheme was introduced by Lord Mayor Campbell Newman in the 2008-09 Brisbane City Council Budget and has been strongly opposed by unit owners, particularly in inner city areas.Paul Cassels and Darryl Penfold, the president and vice-president of the Brisbane Association for Rates Equity (BARE), filed documents in the Supreme Court in which they seek a court order declaring the new rates scheme unlawful and invalid. The action has been brought by Mr Cassels and Mr Penfold on behalf of all BARE members, who are owners of lots in community titles schemes in Brisbane.
Outside court Mr Cassels said the Lord Mayor had tried to set the rest of Brisbane against unit owners by declaring they were millionaire "penthouse owners".
He said that wasn't true and the BARE was made up of average people who were opposed to rate hikes of up to 500 per cent. "The actions of the Lord Mayor have been disgusting," he said.
Mr Cassels said he hoped the Lord Mayor would reconsider his stand before the matter had to go to a court hearing. He predicted the issue would be a major factor in the next state elections.
Mr Cassels said the parity factor was a controversial rating mechanism that dramatically increased the general rates on thousands of units and townhouses throughout the city along with commercial and retail strata title property.
He said while the initial impact of the scheme would be felt most in inner city and near city areas, the exponential value formula on which the scheme was based meant that every year more and more units throughout Brisbane would be automatically "caught." BARE has already been instrumental in a substantial re-working of the scheme.
However, BARE has made it clear that it wants the scheme dropped and the rates cap on owner-occupied CTS property (also removed last year as part of the parity scheme) reinstated immediately.
Source: Courier Mail
despite the reported gloom
"After an eventful year’s end, it’s difficult to see where residential property is heading into the new annum. Media reports daily on the poor state of the economy and the likelihood that things will get worse before they get better, yet some signals are conflicting. There are plenty of locations and sectors that still lack stock and it appears that landlords are continuing to get historically high rents despite the reported gloom."
"For those wanting to bag a bargain perhaps the best prospects lie in some of those previously difficult to enter suburbs such as New Farm and Tenneriffe. Buyers over $700,000 have been thin on the ground and tenants are finding rentals a bit pricey, so it seems demand in these golden suburbs is becoming a little tarnished. Keep your ear to the ground and you just might bag a winner, but remember to keep things in perspective. Look for capital growth over a reasonable three to four year horizon. You’re unlikely to make your killing over the next 12 months."
"Of a related nature, good opportunities are also evident in the current market to purchase resale apartments in near new and recently completed buildings on the Gold Coast at prices which are at a significant discount on both the original sale price of the unit and also on the asking prices of similar new units. In some instances, the resale price of apartments appears to be below replacement cost of a similar new apartment."
Source HTW
Apartment Prices Dip
See Brisbane Times
Brisbane experienced a mixed December quarter, with house prices rising 3.3 per cent and units backtracking 3.5 per cent. Unit prices during 2008 dropped 6.5 per cent and house prices firmed 0.4 per cent.
More Rental Properties
"The number of available rental properties in Brisbane will increase this year as investors struggle to offload their real estate assets and become "reluctant landlords" instead, one expert predicts."
See Brisbane TimesMonday, 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.
Rentals In Brisbane
- Ciana Indooroopilly, 2 bedroom rents range from $475 to $600 per week
- Parklands Sherwood, 2 bedrooms from $440 per week; 3 bedrooms from $540 per week,
- Fresh Toowong, 2 bedrooms about $500 to $550 per week
- Admiralty Towers One, which has large apartments
- Arbour on Grey, from $550 per week for a 2 bedroom
- Metro 21, has both furnished and unfurnished, and is not doing short stay rentals so the building is more stable and homely
Sunday, January 18, 2009
SL8 Opinion part two
Saturday, January 17, 2009
Riparian Plaza Resales
"BRISBANE: Unit prices in an an exclusive city residential tower continue to soar in the face of economic crisis, and cashed-up investors are lining up for a piece of the action.
The Riparian Plaza in Eagle St houses three of the inner-city’s most expensive residential properties sold last year, and their values were up 27 per cent compared to similar properties sold at the same time in 2007."
See City NewsTennis Anyone?
Mirvac's Tennyson Reach project sold extremely well to start, but sales appear to have stalled. There are six apartment buildings planned for the site, at Tennyson in Brisbane on the same site as the Queensland Tennis Centre. Although more than 65,000 tennis spectators attended the recent tournament last week, no apartments were sold during the event.
The first two apartment buildings on the site, containing 115 apartments released in June 2007, sold out in three days. Prices ranged from $943,000 to $4.9M. These two buildings should be read for occupancy in the next 5 months.
The third building, currently for sale off the plan, has 92 apartments. Released in December 2007, 70 apartments still remain for sale. Originally marketed with a minimum price of $805,000, the minimum advertised price has now been reduced to $698,000.
According to the AFR, Mirvac plans to release building 4 at the end of 2009.
There are more than 10 resales listed on RealEstate.com.au. These include:
- 3 bed on 6th floor, listed at $1,820,000 (155sqm of internal living plus 15sqm of balcony)
- 3 bed on 5th floor, listed at $1,795,000 (174sqm of internal living plus 21sqm of balcony)
- 3 bed on 4th floor, listed at $1,395,000 (169sqm of internal living plus 21sqm of balcony)
- 3 bed on 2nd floor (so restricted river views I suspect), listed at $1,515,000 (162sqm of internal living plus 15sqm of balcony)
My guess is that these prices will drop, as a number of owners will not want to or can't settle, and rents for these apartments will be luck to be more than $800 a week.
New Top End Mooloolaba Apartment Building
Signature 87 by Juniper. Prices said to range from $5.98 million to $6.995 million. So the top end can't be too bad if Juniper releases this. Completion due late 2010. According to the AFR, David Kortlang from Juniper said investment in Mooloolaba and ocean front properties remainded strong. But the AFR said only 36 new units (from an inventory of 818 new units) sold on the Sunshine Coast in the six months to November 2008.
Apartment Areas Typical Apartment 465 m²
- Internal 333 m²
- Terrace 132 m²
Number of units 10 (one per floor only)
Security Exclusive level access with private lift lobby on level, CCTV, proximity sensors, panic button and secure car park entry
echnology Full home automation including C-Bus lighting,
Kitchen Finishes Miele appliances, Professional gourmet kitchen with scullery (butlers’ kitchen), Home automation control centre
Lounge Room 50” concealable television
Bedrooms 4 Bedrooms, 42” concealable television in Master
Bathrooms 4 Bathrooms + powder room
Media Room 80” fixed television panel, Projector, Surround Sound, Touch screen control
Pool Private pool terrace with exclusive lap pool (per unit)
Friday, January 16, 2009
Top End Not So Top?
"Holiday homes have also taken a hit, with PRDnationwide Maroochydore beach apartment specialist Alexander Veal saying the number of listed properties had increased by about 15 per cent in recent months."
See Brisbane Times
Brisbane Apartment Hotspots
The combination of continued population growth and an undersupply of residential stock will lead to increased prices in the long-term, Mr Gross said.
Pradella's large-scale Parklands at Sherwood development is also likely to underpin growth, with stage one of the $150 million project nearing completion.
"As new, quality stock hits the market, it is anticipated the median rental figures for apartments in Sherwood will also grow significantly, providing investors with exciting purchasing opportunities," Mr Gross said.
See Brisbane Times
Shoe Box Apartments
See Brisbane Times
Vultures Turned Away
http://city-north-news.whereilive.com.au/news/story/buyers-forced-to-dig-deep-to-secure-dream-homes/
Market Wrap
"Saying we have passed the worst is a brave call in an environment where the world economy is in such a poor state. The risks that remain for us are that unemployment increases significantly and immigration is slowed as a consequence of government reacting to the higher level of unemployment. The balance to this is the lower interest rates which will reduce defaults while people continue to hold down a job."
"As a blanket rule you should stay out of the Gold Coast market, Western Australia and Brisbane units unless you are very well researched. These markets will be ripe for the picking late in 2009 when we should have passed their bottom but currently they look as if the risks are too high and the bargains will not yet be presenting sufficiently. Sellers will still be holding unrealistic expectations."
Reports 7.06% growth in Brisbane apartment prices in 2008, and 10% rent growth for same period. Sales volume drops from 16,000 to 12,370 Brisbane apartment sales (comparing 2007 and 2008 years).Construction Costs
An interesting presentation regarding construction costs, including pipeline of developments, is located at:
www.mitbrand.com.au/Sunday, January 11, 2009
Prediction from RP Data
SL8 Update
"With more than 90% of the 1, 2 & 3 bedroom apartments sold, limited opportunities remain to invest in SL8’s West End apartments. The two bedroom apartment final release is now selling from $565,000-$975,000."
Source: SL8 websiteWednesday, January 7, 2009
Hamilton Harbour Website
Devine has new content on its Hamilton Harbour website, www.hamiltonharbour.com.au
"1, 2 & 3 bedroom apartments $295,000 to $1.59M
- two commercial towers commanding the Kingsford Smith gateway
- two residential towers providing city and river views for many apartments and huge al fresco balconies for all
- an urban village in between, where residents and office occupants will mingle among boutiques, bars and restaurants they call their own
Beyond their own boundary, Hamilton Harbourites have easy strolling access to the dining, shopping, cinemas and City Cat terminal which already make this riverside enclave one of Brisbane's most attractive new places to live and work.
At the upstream end of Northshore, Brisbane's grandest and most ambitious ever urban renewal initiative, Hamilton Harbour is a landmark development which can place you at the centre of the city's astounding future growth. As a resident, tenant or investor, Hamilton Harbour demands your serious attention."
River City Apartments Fire
Queensland fire fighters say overhead sprinklers saved an inner-Brisbane apartment block from serious damage. More than 30 residents were evacuated from the River City apartment block around midday, after a fire started in a couch on a balcony of the 15th floor of the building.
Fire fighter Dave Sutch says overhead sprinklers helped contain the fire, but also caused some damage. "We have severe water damage on the 15th floor and it's leaking through to the 14th floor," he said. Residents were not allowed back into their apartments for more than two hours while fire crews secured the building.
ABC NewsThis building is being run by Oaks as a hotel, but I suspect that it does not have hotel standard fire safety standards.
Gold Coast Apartments in Trouble
"The unit market on the Gold Coast is investor driven. There s currently a good selection of high-rise units available for sale in Broadbeach, Southport, Coolangatta/Kirra and Surfers Paradise. A majority of the units currently available for sale include both developer stock and resale stock within new developments. A large proportion of the resale apartments are being offered for resale by distressed owners and hence have asking prices which reflect a reasonable discount on both their original sale price and also the price levels of the balance new apartment product in new unit projects. In this respect, it is very difficult to attract sales of new apartments given the more competitive pricing structure of the resale apartments. A large proportion of new apartment product on the Gold Coast is sold to interstate and to a lessor extent, overseas investors at price levels which are considered to be in excess of local market values. It will take some time for these stock levels of units to be absorbed especially given the current soft market conditions. Some purchasers, who bought ‘off the plan’ 12 to 24 months ago, are foregoing their deposits before settlement on new product rather than absorbing the loss in market value on settlement."
"It appears there will be more pain to come however for how long and to what extent is difficult to predict. The property market of 2007 is a distant memory with current market values being more reflective of values achieved in 2006."
Source HTWSunday, January 4, 2009
Stockland Residential Outlook December 2008
- The top end of the residential market is very soft. Very fragile, and oversupply issues.
- First home owner segment stronger due to interest rate cuts and government grants
- Choice between owning and renting starting to favour owning, as rents are rising and interest rates are falling
- Investors returning to the market due to interest rate cuts, rising rents and poor stock market performance. Investors make up 10% of Stockland buyers at present.
The Mill at Albion
Stockland and FKP
"FKP intends to continue discussions with Stockland, to ascertain whether a transaction in the best interests of FKP securityholders can be consummated."
See FKP Media Release from December 2008
Insignificant Price Decease in Brisbane for Apartments
See RP Data Rismark Indices released at the end of December.
generally provided the best capital growth.”
“Market activity is already showing signs of increasing at the lower end of the pricing scale,” he said."
See also Press Release
Gold Coast
From The Australian
"THE boom in beachfront real estate on the Gold Coast is well and truly over..."
Article About United States Housing Bubble
Extract:
"I'm ending my discussion of this issue in 2004, but throughout the years since, a number of analysts have emerged on both sides of the housing bubble question. So I do not claim to be comprehensive in my review. I just wanted to call attention to a few of the more prominent analyses that crossed my desk when the housing bubble first caught my attention.
There were many economists who did see it coming, but there were many others of equal or greater prominence and authority who repeatedly insisted that there was nothing to worry about. Under the circumstances, ordinary investors can hardly be faulted for taking actions that unwittingly fueled the bubble and are now having disastrous consequences for themselves and the nation."
Sunday, December 28, 2008
Fortitude Valley
"For people who are priced out of the city itself, these areas are a good option," Mr Kusher said.
"Fortitude Valley in particular has got a really good rental yield at the moment and stock there is quite varied. Overall, rental growth is starting to improve, so for those people who have perhaps lost money in shares, more investors will be attracted back to property."
See Brisbane Times
Predictions for 2009
At the beginning of 2008, I made a number of predictions in this post.
The predictions were mostly wrong!
The Brisbane apartment market did not grow significantly in 2008, and took a minor step backwards. At present, there are fewer buyers and more sellers. For some off-the-plan developments, no sales have been made for months. Second tier buildings and buildings with more than 200 apartments have not done well.
So I will be careful with my predictions for 2009:
I still believe that quality inner city apartments in Brisbane will do well in 2009. Provided there is no significant unemployment and provided that foreign students continue to come to Brisbane, vacancy rates will remain low.
In 2008, only four new inner city apartment buildings completed and settled. These were Evolution (over priced), M on Mary (which has mostly 1 bedroom apartments, and the developer is now in liquidation), Flow at West End and Iceworks at Paddington. In 2009, no new large inner city apartments will settle. Groundwork has started on Mertion's Soleil and the Trilogy Tower project, but these will no complete until 2012. Mirvac's Tennyson Reach project will settle two buildings in 2009, and FKP's SL8 at West End will also probably complete in 2009. So not much new stock.
So here are some predictions for 2009:
• The price of a good quality 2 bedroom 2 bathroom apartment in Brisbane, with views, will range from $780,000 to $850,000.
• The price of an average quality 2 bedroom 2 bathroom apartment in Brisbane will struggle to pass $550,000.
• Average rent for an unfurnished 2 bedroom apartment will rise to $600 per week.
• Investors will return to the market, as interest rates are falling and rents are rising.
• There will be more action in the inner suburbs than in the city. Prices for quality apartments in areas such as Indooroopilly and Toowong (where there is a train station and regional shopping, close to education facilities) will boom. By the end on 2008, it will be hard to find a good quality 2 bedroom apartment in these areas for less than $600,000.
• The Gold Coast apartment market will tank even more. The Sunshine Coast apartment market will remain steady.
Meriton's 43 Herschel Street
Here is a floor layout, as submitted to council by Meriton. It shows 10 apartments per floor, with a mix of studios, 1 beds and one 2 bedroom apartment. The apartments have no balcony, and are small. The 1 bed hotel suites in Trilogy Towers are larger than the 1 bedroom apartments in this proposed building.
More photos and images here.
Thursday, December 18, 2008
Stockland Downgrades Residential Portfolio by $105M
"He said two factors in the past two months had prompted the downgrade of its residential inventory.
He said there had been a "massive downturn" in the top end of the residential market.
Secondly, the company had made a "conscious decision" to sell some high-end projects outright at a discount to their carrying value.
Mr Quinn said: "The first home buyers are well and truly back because it is now cheaper to buy than to rent."
Stockland had started to reconfigure some high-end projects to create more affordable products.
"Traditionally, 20-25 per cent of our market is first home buyers. They now represent 45 per cent of our total buyer profile." He said sales had picked up nationwide."
See The Australian
Wednesday, December 10, 2008
West End Overpriced?
Rate Increases For Brisbane Apartments
"A ceiling on rate increases for Brisbane's CBD unit owners under Brisbane City Council's controversial new rates policy will be debated at today's last council meeting for 2008.
Lord Mayor Campbell Newman promised to introduce the policy from the third quarter of the 2008-09 financial year, which starts on January 1.
The scheme was proposed at June's Brisbane City Council budget and - suggested lifting the general rate paid by unit owners so they pay an equivalent rate to home owners in a property of the same value."
Brisbane Times