Friday, May 1, 2009

Matusik comment

HTW Month in Review

Month in Review

HTW says that, in relation to sales of Brisbane apartments, the market is at the bottom.

Prices Bounce Back

See RP Data Index and Full Report

Brisbane
The slowdown during 2008 hit Brisbane harder than many other capital cities, which is largely due to prices perhaps overshooting the mark in ’07. Brisbane had a stellar run in 2007 with dwelling values increasing by 25 per cent over the calendar year – the highest annual rate of growth of any capital city during that period. Over the last 12 months Brisbane residential values have fallen 3.4 per cent across both the houses and units market. Modest growth has returned to the Brisbane market during 2009 with the first three months of year seeing house values up 1.4 per cent and unit values up 0.4 per cent. Rental returns are approximately on par with the national average with houses providing a gross yield of 4.7 per cent and units 5.4 per cent.

Coolum

Miami Beach Luxury Apartments Doing OK

Even in the USA, where there is a property bust, certain properties are not doing so badly. What does this say for places like Noosa?

"... Brokers are quick to point out that all the gloomy headlines about Miami’s condominium glut and Florida’s foreclosure crisis describe the situation on the other side of the causeway, not in the city of Miami Beach, especially the fashionable enclave of South Beach. While South Beach has certainly cooled — inventory is up, prices are down, and agents say they’re working harder than ever to put together deals — anyone expecting to snap up a vacation getaway with views of the Atlantic for a song better search in a much less desirable part of the state."

See NY Times.

Friday, April 24, 2009

Survey Prediction

"It is predicted that the residential market in Sydney will be the first market to move forward next year, ahead of the other property classes and markets in Melbourne and Brisbane, which won't see any growth until 2011," said Mr Hecek.

Source: The Australian

Stockland Results 2009

Mr Quinn told analysts and reporters that Stockland’s residential sales performance remained strong, particularly among first-home buyers, and there were signs of recovery among second- and third-home buyers.

Mr Quinn said the high-end residential market remained soft and continued to affect Stockland’s apartments business.

Source: The Australian

Brisbane Rents

"Apartments are leading the surge in Brisbane rental prices, with weekly bills soaring more than 13 per cent in the past year.

New figures released today show the median rental price for units in Brisbane has increased from $300 to $340 in the past 12 months.

The 13.3 per cent jump means Brisbane has experienced the largest increase in year-on-year unit rental prices of all the major cities in Australia, except for Darwin where the median unit asking price rose 14.3 per cent."

"For landlords and investors, rental yields are now approaching or exceeding mortgage rates, and in some areas positive gearing is a real possibility.

"This will provide some stimulus for potential investors to re-enter the market and take advantage of favourable conditions."

Brisbane Times

Property Opinion re Australia

"Australian residential property markets are in much better shape than residential markets in Britain and the US. Higher lending standards in Australia mean there are fewer defaults forcing house prices down. There is a housing shortage and immigration, despite a cut, still remains strong."

Brisbane Times

Sunday, April 19, 2009

Aurora No Sale

Auction on Saturday: Aurora, Apartment 609, 3 bedrooms, 60th floor, passed in. Now listed at $825,000. Previously listed at $915,000

SL8 in West End



SL8 in West End is nearing completion. The building has an industrial look, and the apartments have good views of industrial sheds.

2 bedroom listed for re-sale at $570,000 (Apt 203)
2 bedroom listed for resale at $560,000 (Apt 213)
2 bedroom listed at $690,000 (Apt 241)
2 bedroom listed at $550,000 (Apt 142)
2 bedroom listed at $617,000 (Apt 214)

For most of these apartments, the second bedroom looks over the back (open) hallway.

"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."

See SL8 Real Estate (FKP)

Update: See readers comments here.

Thursday, April 9, 2009

Rental Yield for Brisbane apartments (REIQ December 2008 Quarter)

Postcode Suburbs RankYield
4000Brisbane City, Spring Hill 16.30%
4169East Brisbane, Kangaroo Point 26.00%
4101South Brisbane, West End 65.10%
4068Taringa, Indooroopilly 75.10%
4006Newstead, Fortitude Valley 85.00%
4066Toowong, Auchenflower 95.00%
4005New Farm 114.80%
4067St Lucia 144.70%
4059Kelvin Grove 184.50%
4007Ascot, Hamilton 214.50%

Sunday, April 5, 2009

St Lucia - Visage and The Studio

Visage at St Lucia has sold out prior to completion. There are 26 apartments. Off the plan projects, if priced correctly, are still selling out. 2 bedroom apartments priced from $470,000. Developed by Aspect Property Group

This developer has DA to do a development within the University of Queensland grounds. Called "The Studio", this will be studio apartments for student.

Brisbane Unit Auction Results

Most of the above were auctioned at the Ray White Sunday Auction

Investors Returning

"Increases in rents have seen yields for Brisbane houses and units (at 4.4% and 4.9% respectively) increase, and yields for houses are now back to levels last seen in 2002. This together with lower interest rates is starting to make a more compelling case for investors, and counter cyclical investors are starting to return to the market."

"Prices did not peak until early 2008 and have only come back 5% since then. Whilst there is potentially further downside in the short term, the market is likely to stabilise and the high levels of demand are expected to see growth return once the economy starts to pick up. Brisbane has generally had high demand for apartments and units, and this means that the fall in prices for other dwellings has not been as much as for houses.

MLG Property Report - March 2009

Friday, April 3, 2009

New Website for Portside

Multiplex is still selling Portside Building 3.

Apartments for Sale
New website

1 bed plus study, level 12, 83sqm = $600,000
2 bed, 2 baths, level 15, 115 sqm = $1,120,000

Gold Coast Price Collapse

"Matusik Property Insights analyst Michael Matusik says the most dramatic price falls are in Gold Coast suburbs where premium and tourism-dependent holiday units are in oversupply. "Developers that have sold 60 to 80 per cent of the development are now looking for a profit or to break even so they quit the project and advertise apartments that were $1.1 million for $900,000," he says."

"L J Hooker's Surfers Paradise principal, John Newland, says apartments that sold for $1.4 million last year are being marketed for quick sales with asking prices about $800,000. He also reports a two-bedroom apartment with ocean views that sold last year for $580,000 is now listed for resale at $449,000. And another listed at $530,000 has been discounted to $439,000. Surfers International principal Malcolm Catchpole says an apartment that sold last year for $555,000 and rented at $560 a week is now on the market for $359,000."

For Full Story, See Domain

Toowong, St Lucia and Taringa Unit Report

"The Toowong Area unit market has seen a steady increase in median price during a five year period. Growth during this time was at a compounding rate of 9.6% per annum, with an average of 333 transactions per six month period. In the past year alone growth has climbed to register a median unit price of $410,000, equating to an increase of $43,000 or 11.7% from the previous year."

Source PRD Report from www.prd.com.au/research/

One Bedroom in Roma Street Parklands


One bedroom for sale in Roma Street Parklands - Pinnacle - for $669,000. Nice apartment, but that seems expensive! Compare a one bedroom at Quay West for $450,000

Body Corporate Levy Defaults

There are some buildings where there are a large number of owners who have not paid their body corporate levies for some time. Typically, the owner is trying to sell the apartment, and so stops paying body corporate fees. When buying, I recommend that it is good to search to see if the seller is behind on body corporate fees -- as this may indicate that the owner is desperate to sell. I would also avoid buildings where there are a large percentage of owners behind in payments. For example, there are a number of apartments in Aurora where body corporate levies have not been paid.

Saturday, March 28, 2009

Grey Street South Bank

The Brisbane Convention Centre is upgrading and rebuilding on Grey Street at South Bank.

See this video.

This can only improve the values of apartments in South Bank.

Brisbane Apartment Prices to Grow

Real-estate experts are anticipating unit sales will outperform houses throughout 2009, with first-home buyers expected to be the market's driving force.
Brisbane Times

Best Buys for Brisbane Suburban Apartments

I have looked around this weekend, and these apartments seem to be good buys:
  • Ciana at Indooroopilly has about 15 new apartments left for sale from developer. Three bedroom apartment for less than $565,000; large two bedroom apartments from $485,000 to $600,000.
  • Parklands Sherwood - large two bedroom with 2 cars and views $535,000
  • Fresh Toowong - large new 2 bedroom garden apartment at $520,000
  • El Dorado off the plan: 2 bedroom apartments less than $600,000
  • Precinct Toowong - mid size furnished two bedroom listed at $529,000
  • Encore Toowong - 1 bedroom garden apartment listed at $339,000
There is also Tennyson Reach, where off the plan purchasers are trying to sell 2 bedroom apartments for $1,200,000 and three bedrooms from $1.6M. Ouch!

Thursday, March 19, 2009

Recent Apartment Sales in Brisbane City

Skyline - Apartment 344 - Level 34 - Two bedrooms - $600,000 (highest bid, did not sell, relisted at $650,000 and did not sell. Current owner paid $695,000)
Aurora - Apartment 439 - Level 43 - Two bedrooms - $460,000
Club Lodge - Apartment 51 - Two beds, two cars - $440,000
Vue - Apartment 2409 - Two beds - $445,000
River City - Apartment 3802 - Two beds - $403,220
Flow West End - Apartment 80 - Four beds - failed to sell at auction

Rive Apartments Hamilton

If you have thinking of buying in Hamilton Harbour, have a look at Rive Apartments first. Similar location, larger apartments, and a lower price.

See also http://www.vecchio.com.au/news/2009-03-04.pdf

Sunday, March 15, 2009

Harbour One Launch!

Ken Woodley, the Marketing Director for Devine, left the Harbour One sales office in Hamilton this afternoon with a big smile on his face. As he drove back to his large apartment in the Mirvac Quay West building in Brisbane, he was no doubt thinking about the 85 apartments that his team "sold" by way of expression of interest over the past two weeks in the Hamilton Harbour development.

The glossy brochure for Hamilton Harbour given out at the sales office is very impressive. You can feel the quality in the brochure. It is a shame that the brochure is misleading. There are nice PhotoShopped photos (i.e., fake photos) that show happy people on balconys with impressive river views. However, no apartment in Harbour One will have a balcony with the designs shown in the brochure, and the views will not be anywhere near as impressive (because there are buildings between Harbour One and the river.) And is it correct to say "Waterside Living" for a building on Kingsford Smith Drive that is two blocks back from the river with no direct river views?

The apartments with the best views face West, which is not great in a Brisbane summer.

The apartments are small and expensive. There are only three elevators for 238 apartments! There is no gym included -- you can join a commercial gym being built on the site. The living areas for most apartments have popcorn ceilings with oyster lights -- not the highest quality. Many one bed apartments do not have a car park. And a number of the one bed apartments do not even have a laundry -- not even a cupboard with a washing machine or dryer.

Type A One bedroom
41 sqm internal, 50 sqm total
No river views.
No car park.
No laundry.
Kitchen is a strip of cupboards in living room.
No room for dining table inside -- plan shows dining table on balcony.
Sliding doors to bedroom.
Price range - $295,000 to $385,000.
Price per square metre for most expensive of this design - $7,700
But if you add $50,000 for lack of carpark, then price per square metre is $8,300.

Type C One bedroom plus "extended living space"
54 sqm internal, 64 sqm total
Potential river views.
Kitchen is a strip of cupboards in entry way.
No room for dining table inside -- plan shows dining table on balcony.
No bath - shower only.
Price range - $405,000 to $495,000.
Example: Level 7 apartment is $430,000
Price per square metre for most expensive of this design - $7,734

Type E Two bedroom
73 sqm internal, 84 sqm total
Potential river views.
Second bedroom not near second bathroom
Both bedrooms at front
Price range - $555,000 to $695,000.
Example: Level 10 - $640,000
Price per square metre for most expensive of this design - $8,273

Type F Two bedroom
84 sqm internal, 98 sqm total
Largest two bed apartment
End apartment.
Potential river views.
Excellent glass-fronted wall to ceiling living space -- should give this apartment a wow factor!
Bedrooms at side or back -- second bedroom looks into blank wall.
Price range - $605,000 to $805,000.
Examples: Level 10 - $690,000; Level 12 - $745,000
Price per square metre for most expensive of this design - $8,214

It would be interesting to track re-sales in the recent Devine Charlotte Towers, to see if the apartments were priced too high when sold off-the-plan.

According to REIQ, the medium Hamilton apartment price for December Qtr 2008 was $415,000, which is down 11.6% on the previous quarter. Buying an existing apartment may be better value, or even Portside. For example, a two bedroom apartment in Admiralty Two, with direct river views and absolute river front, can be purchased for less than $650,000 (106 sqm) and is less than $6,000 per sqm. A one bedroom in Quay West, where Ken Woodley lives, is about 74 sqm, includes a car park, and is about $440,000 (less than $6,000 per sqm).

Friday, March 13, 2009

Gold Coast Still Not Golden

Queensland development group Pikos Group has announced it will slash prices by 25 percent, or up to $600,000, on all beachfront apartments in its three Gold Coast projects so it can keep its staff and contractors employed and pursue further beachfront acquisition opportunities.

The Brisbane-based company, headed by Pedro Pikos, has responded to the property market slowdown by discounting prices on all remaining stock. Source

REIQ Apartment Price Report for Brisbane - Dec Qtr 2008

As house prices escalated, units and townhouses were the most affordable – and often the only – option for first home buyers. But with the $14,000 and $21,000 boost monies now available, many first-time buyers can now afford to buy a modest house instead.

“This trend, plus investors not yet comprehensively returning to the market, means the unit and townhouse market has been affected by lower overall demand in the December quarter. Over the year, however, most areas recorded steady price growth,” REIQ chairman Peter McGrath said.

Brisbane City - Median December 08 Qtr - $460,000, with 2.2% increase over the Dec 07 results.
Indooroopilly - Median December 08 Qtr - $375,000, with 6.6% increase over the Dec 07 results.
Taringa - Median December 08 Qtr - $365,000, with 10.4% increase over the Dec 07 results.
Toowong - Median December 08 Qtr - $342,500, with 14.9% increase over the Dec 07 results.
West End - Median December 08 Qtr - $524,000, with 7.9% increase over the Dec 07 results.

Tuesday, March 10, 2009

French Quarter - Site Plan


Devine is proceeding with the French Quarter development, on Albert, Alice and Margaret Streets in Brisbane. Devine has applied for Council approval for a commercial tower (tower 3) at 111 Margaret Street.

Gold Coast:: Heading Up or Down?

A recent story in the Gold Coast Bulletin, which seems to try only to have positive stories about Gold Coast real estate, states:

"New apartment sales slumped during the December, 2008 quarter with just 77 unconditional transactions taking place for a total of $62.6 million, according to Colliers' latest Gold Coast Apartment Report. The figure was the second lowest on record since the research was first compiled in December 1996.

The research found sales in the December 2008 quarter, dropped significantly from the two previous periods, with 121 sales recorded in the September quarter and 448 sales in the June quarter. It was the worst quarter on record since December 2000, when 74 sales were recorded for a total of just $28.5 million. In the past two years, the number of sales per quarter has averaged 356. The report found the level of stock had also increased, with 2259 new apartments now available for sale, approaching the record figure of 2574 available in June 2007."

The story is titled "The only way is up for unit sales" and the remainder of the story rationalizes why this is the bottom of the market on the Gold Coast, and why it will get better for the remainder of this year. I disagree. My view is that the Gold Coast apartment market is still overpriced, and will see a significant decrease in price over the next 9 months.

Soleil Tower Price List

SELLING APARTMENTS OFF THE PLAN - Soliel Brisbane
Prices as at 9th Feb 2009
All apartments for sale start from level 31

One Bedroom apartments priced from $346,000
Two Bedroom apartments priced from $489,000
Two Bedroom plus study apartments from $529,000
Three Bedroom apartments priced from $774,000

Expected settlement at the end of 2011.

Water's Edge Progressing But Slowly

Pradella reports as follows:
"Waters Edge has received a fantastic response since its October launch late last year and has now achieved 50 sales in total to date. Despite the uncertain times, investors are regaining confidence and returning to the property market. Waters Edge, located on the river at West End, is testament to this with 2 apartments sold within the last week, with a further 3 expressions of interest obtained."

Friday, March 6, 2009

Resort Corp

Resort Corp, which is developing the Quay West Noosa Resort, has gone bust.

The Australian

Coastal Apartment or Working Class House?

"There are few more iconic sea-change destinations than the Gold Coast, which has earned a reputation as the king of population growth in Australia.

But it's a long way short of being the king of capital growth.

Capital growth on the Gold Coast over the past five years has been half that achieved next door in downmarket Logan City, according to Real Estate Institute of Queensland figures.

The Moreton Bay region, a municipality that encompasses cheap mortgage-belt suburbs in Brisbane's north, has achieved considerably higher capital growth than the Sunshine Coast next door.

Within the Sunshine Coast municipality, the market leaders on capital growth are the railway towns in the hinterland (such as Beerwah and Landsborough), not the sexy coastal locations Noosa and Mooloolaba."


See Terry Ryder

Hamilton Harbour Floor Plans



Devine has released floor plans for Hamilton Harbour.

The apartments are small.
Example one bed sizes are:
  • 41 sqm internal, 50 sqm in total
  • 45 sqm internal, 53 sqm in total
  • 54 sqm internal, 64 sqm in total (see plan above).
Example two bed two bath sizes are:
  • 73 sqm internal, 84 sqm in total
  • 74 sqm internal, 90 sqm in total
  • 84 sqm internal, 98 sqm in total (see plan above).
All have fully ducted air conditioning. There appears to be 22 levels of apartments, with about 12 apartments per floor.

"The residential buildings Harbour One and Harbour Two are each placed to take best advantage of river views. While being 22 and 19 storeys respectively, the buildings make a deliberate effort to present architecturally appealing building facades to the nearby neighbourhood while providing occupants with the best available living environment within the apartments."