For Landlords, January is the best time to find a tenant

Double Click on the above chart, from Pro Rentals

Yungaba at Kangaroo Point

DEVELOPER Australand will this month begin marketing its $160 million Brisbane apartment development -- to be built on the heritage-listed site where the city's first immigrants arrived in 1887.

The 167 apartments are planned for the Yungaba House site at Kangaroo Point, an exclusive pocket of inner-city real estate on the banks of the Brisbane River.

The development, which has been hotly opposed by the Yungaba Action Group, involves three new apartment buildings as well as the conversion of historic Yungaba House immigration centre into 10 luxury residences. According to selling agents Colliers International, this month's scheduled release of off-the-plan apartments comes at a time of huge pent-up demand from buyers.

"In a Brisbane market paralysed by the credit crunch, buyers have had very limited off-the-plan options," said residential director Ben Langfield said.

"The launch of Yungaba comes at a time when buyers are crying out for a slice of inner-city living."

Built in 1887 as an immigration reception centre, Yungaba accepted its first six residents at the end of that year from the migrant ship the Duke of Buccleuch. Australand Queensland general manager Nigel Edgar said the project, which included the construction of a public multicultural centre, would unlock lost heritage and give residents an opportunity to live in one of Brisbane's most exclusive inner-city areas.

However, Australand's plans have not impressed the Yungaba Action Group, which says the planned multicultural centre is not an acceptable substitute for a building that was the gateway to Queensland.

The Kangaroo Point development, on a 1.9ha site bought by Australand in 2003, will be a mix of one-, two- and three-bedroom apartments as well as double-storey sky homes.

The Australian

Prices range from $410,000 for a 77sqm one bedroom to $2.2M for a 286sqm three bedroom apartment.

Live Next Door to the President

The house at 5040 South Greenwood Avenue, next door to the Obama family's residence, hit the Chicago real estate market over the weekend and caused quite a stir.

NY Times article

Population

"There is the very real prospect that urban planners will have to manage the development of three Australian mega-regions (Sydney, Melbourne, southeast Queensland) each rising to between five and seven million by century's end."

Salt in The Australian

Onsite or Offsite Real Estate Agent?

If you own an apartment, and wish to rent it, there is often a choice between using the onsite building manager (who will often have a real estate agent license) or an offsite real estate agent. There are positives and negatives of both. This is the view of Chris Hinds, an offsite agent, as set out in a recent mailing from him:

"In this day and age, the majority of On-site management offices can provide generic Property Management services. Inappropriately trained staff are usually placed within minimal staffed offices and a heavy reliance is placed on technology and computers to deliver the required service. The business owner is normally no-where to be seen whilst the management of your property is generally handled by unaccountable staff that do not even own an investment property themselves. Sound familiar? Common concerns that generally arise from the above are…

• The Caretaker/Building Manager condoning backpackers or short term letting.
• Poor or unsupervised tenant selection.
• Overcrowding and increased wear and tear contributed by the excess of students, back packers & short-term lets within the building
• Is the most appropriate amount of rent charged to the tenant based on rental market conditions.
• Levies and bills attended to and paid on time.
• Entry and Exit Condition reports completed and done so thoroughly.
• Caretakers/Building Managers wanting an extension could signify their desire to sell out!
• Watch out for those Hotel operators, they are well known to reduce the value of your property."

REIQ June 2009 Report

"Buyers are again looking to units and townhouses with sales numbers surging over the June quarter. The REIQ June quarter unit and townhouse results show sales numbers have rebounded in this segment of the market. REIQ June quarter preliminary sales numbers show that the number of sales in Brisbane were up 36 per cent; 22 per cent on the Gold Coast; 14 per cent on the Sunshine Coast; and increased a very impressive 48 and 46 in Ipswich and Logan respectively."

"“While sales numbers are up and there has been some price growth in some areas, this represents a property market in transition from the very tough conditions of the past year,” Mrs Bennett said. “These results show that outside influences are starting to no longer burden our market and that confidence is also beginning to return.”

"In Brisbane, solid performers for units and townhouses over the quarter were the inner-ring suburbs of Auchenflower, Toowong and Yeronga. Auchenflower’s median is up 11.8 per cent to $450,000 over the quarter, Toowong’s is up 12.7 per cent to $448,000, and Yeronga experienced 14.7 per cent median price growth to $393,500. Auchenflower and Yeronga also had healthy price growth over the year. Auchenflower and Toowong are both located within 5km of Brisbane’s CBD and have a mix of established and new unit complexes available. Yeronga is 7km south of the city and is in a prime position along the Brisbane River."

Brisbane City - Median Price June Qtr 09 - $351,000 - down 5.8% over one year.
Indooroopilly - Median Price June Qtr 09 - $391,500 - down 6.1% over one year.
New Farm - Median Price June Qtr 09 - $435,750 - down 15.7% over one year.
Sherwood - Median Price June Qtr 09 - $342,500 - up 2.3% over one year.
Taringa - Median Price June Qtr 09 - $398,800 - up 1.6% over one year.
Toowong - Median Price June Qtr 09 - $448,000 - down 4.6% over one year.

Trilogy Tower Update

Website says that settlement now due in 2013.
http://www.trilogytower.com.au/trilogy-hotel.html
"Due for occupation in 2013, it will dominate the city and waterfront from its landmark position in the CBD's highly prized 'Golden Triangle' location"

Investment in Dwellings

"... the Australian Bureau of Statistics' figures on the country's national GDP expenditure for fiscal 2009 revealed dwelling investment slumped a seasonally adjusted 10.9 per cent. In the June quarter it dived 5.5 per cent."

The Australian

Hamilton Opposition to River Tower

http://city-north-news.whereilive.com.au/news/story/residents-oppose-river-tower/

HAMILTON: More than 100 Hamilton residents will challenge Brisbane City Council this week to object to a proposed 15-storey riverfront development on Kingsford Smith Drive. Tenants from 101 units at Bretts Wharf Apartment Complex in Harbour Rd have sent submissions to the council. They say the multi-unit dwelling, which features short-term and hotel accommodation, will be inconsistent with the area and create traffic chaos. ``Fifteen storeys is a joke in such a tiny area,’’ Tony Hall, who lives on the eighth storey of Windermere tower, said.

Indooroopilly El Dorado Update

El Dorado Indooroopilly redevelopment, which is running a year behind schedule. Prices have risen dramatically! It seems that about nine contracts have crashed since this time last year, as in Sept 2008, the price list showed that there were 25 or 28 apartments remaining for sale. Now:

"Apartments are now selling off the plan with the development due to start in 2010 and the expected completion date is early 2013.

34 apartments are still available as per the attached list and an initial deposit of $5,000 is payable at the time of signing an EXPRESSION OF INTEREST. Body Corp Fees range from $79.41 to $100.90 per week depending on whether you are buying a 1, 2 or 3 bedroom apartment.

More information along with floor plans is now available on the websites below.

www.eldoradovillage.com.au"

Three bedroom apartments, were $805,000, now listed for $925,000
Large two bedroom apartment, was $595,000, now listed at $780,000
Small two bedroom apartment, was $585,000, now listed at $705,000
One bedroom apartment, was $420,000, now $475,000

Noosa Luxury Development

Firstlight Noosa, on Hastings Street.

• 20 apartments
• oceanfront
• priced between $12M and $16M
• timeshares start at $1.5M for six weeks.
• Seahaven Resort to be demonished.
  

The Australian

Blue Sky Capital

Project Website

Admiralty Two - Recent Sales

Recent sales in Admiralty Two in Brisbane in May to July 2009

• Apt 20, level 4, 2 bed, 2 bath, 1 car, 103 sqm - $725,000
• Apt 80, level 14, 2 bed, 2 bath, 1 car, 103 sqm - $725,000
• Apt 97, level 17, 2 bed, 2 bath, 1 car, 116 sqm - $780,000
• Apt 106, level 18, 2 bed, 2 bath, 1 car, 116 sqm - $750,000
• Apt 137, level 24, 2 bed, 2 bath, 1 car, 116 sqm - $815,000

Source: Email from Alan Caughey, Harcourts

Questions

• What will happen to the inner city Brisbane apartment market if foreign students stop coming to Brisbane?
• When interest rates rise, will Brisbane apartment prices fall?
• Will Meriton build a building in Brisbane that is lesser quality than Devine? Is that possible?
• When will Felix have its river views blocked by development?
• Will rental returns to owners in Oaks buildings decrease this year?
• Will apartment prices in Brisbane continue to fall into 2010?
• When first home owners stop buying, will sellers who have not sold become desperate?
• Are the only investors buying at present the vultures and bottom-feeders?

96 Albert Street

The property located at 96 Albert Street is listed for sale as a development site, zoned for high rise development. If developed, this will have a significant impact on the views from Festival Towers and M on Mary.

Pets and Prices

"But real estate agent says pet-friendly apartment buildings are worth more than those that prohibit pets. "Any small apartment block that doesn't allow pets is crazy," Leonarder Collins says. "Owners are just doing themselves out of money."

Domain

Residential Property Prices in Brisbane

Domain reports:

"Although the growth in Brisbane property values was subdued compared to a national increase of 5.9 per cent, South-East Queensland’s market notably did not suffer the dive of markets interstate in the year’s first quarter.

The median Brisbane unit price of $349,666 remained the most affordable of any capital city, and the average property "time on market" has been a testament to the fact.

Both apartments and houses in Brisbane are being snapped up by investors, upgraders and downsizers alike within 29 days the figures showed.

According to rpdata.com properties in Brisbane are providing a "very strong value proposition to potential buyers". The "value for money" in the river city has been underpinned by historically low mortgage rates and only small rises in unemployment."

Valuer's Report

Herron Todd White Valuers report in their August 2009 report that the Brisbane, Gold Coast and Sunshine Coast apartment markets are at "the bottom of the market". They report no change in any market indicator factors over the past month.

Solid Gains in July 2009

Over the first seven months of the year Australian home values increased across every capital city, rising by 5.9 percent nationally.

Combined Brisbane house and apartment values up 3.8% to $437,175 for first 7 months of 2009

Brisbane Apartments were high performing, and outperformed Brisbane houses.

Brisbane Units - days on market = 26 days (almost the best in the nation)

Brisbane Units - 7 months to end of July increase - up 6.25%

Brisbane Units - 12 month Year on Year increase (at end of July) - up 6.58%

Brisbane Units - July 09 increase - up 3.26%

Based on Australia’s largest property database, owned by rpdata.com which includes roughly 145,000 sales for the first seven months of 2009, Australia’s housing recovery has continued in the month of July with solid across-the-board capital gains.

According to the market respected RP Data-Rismark Home Value Index, Australian home values rose by +0.9 percent in the month of July 2009. This brings total capital growth in the first seven months of 2009 to 5.9 percent.

Underpinned by historically low mortgage rates and only small rises in unemployment, Australian home values have now risen 1.8 percent past their February 2008 peak.

Rpdata.com national research director Tim Lawless, said, “Not only has Australia’s residential property market outperformed the other major western markets, it has also provided superior returns compared to shares, commercial property, superannuation, hedge funds and private equities. Australia’s residential market has been further supported by low mortgage default rates, at just 0.6 percent, compared with 5 percent in the US and 3 percent in the UK.”

“Every mainland capital city has experienced solid growth during the first seven months of the year. “ Mr Lawless said.

Property Blog

A good property Blog, written by Chris Joye from Rismark.

Oaks 08/09 Results

Oaks Hotels & Resorts Ltd net profit was down 33.3% to $9.8 million in the year to June 30, 2009, on revenue up 11.5% to $120.9 million.

• 38 properties under management
• 4,788 serviced rooms under management (12% increase over last FY)
• occupancy rate down 2.11% to 84.38 for CBD properties
• average room rate $151 for CBD properties
• new central reservations team -- I wonder what owners are being charged for this?

From Devine's Report

French Quarter in Alice Street Brisbane

"Continuing to progress the submission of an application for a development approval for this exciting future redevelopment opportunity."

Hamilton Harbour

"Excellent market response to the first stage of the “Hamilton Harbour” residential development"

"Development approval now received and marketing of first stage of residential commenced March 2009. First stage 86% sold."

"Strong pre-sales of residential units in Hamilton Harbour stage 1 with 86% of 257 units now sold. (This project is also a JV with Leighton Properties)"

Commencement Dec Qtr 2009
Est. Completion Staged development over approximately 5 years

Source

Brisbane House Prices Still Falling

Professor Chris Eves, who led the study, said the team tracked high value areas, middle value and establishing suburbs.

"The bottom line is that the market is still declining, and the number of homebuyers has not increased according to expectations in relation to the improving economy," he said.

"Our view is that we haven't seen the worst of the decline yet, and property figures in all areas will remain in decline while the unemployment figures are still rising.

"The most significant decline in weekly property listings for sale in the period from February to May was in the middle-value suburbs, which have seen a 17.7 per cent decrease in weekly listings over the past six months."

Source

FKP Slow to Start Construction

"FOUR years after Transit Oriented Developments were touted as key to housing thousands of people around transport hubs, building is yet to start on any.

Instead projects designed to create a self-contained living, working and leisure environment in Brisbane have been blocked by red tape, rising headworks charges, financing issues and business woes.

It's not that the concept has no appeal. FKP's The Mill project in the inner northern Brisbane suburb of Albion has had strong pre-sales. But in light of changing market conditions, FKP is still awaiting approval after reconfiguring some plans.

The company has also spent years developing plans for another TOD over the railway station at Milton, in the city's inner west, and has revised plans awaiting approval from the Brisbane City Council.

But without approvals in place yet there is no certainty as to when construction will start."

Courier Mail

Could This Be Happening Here?

"There is also a stash of inventory hovering on the sidelines: new apartments that have not been offered for sale because developers — who put units on the market in phases — fear they will push prices down further.

Mr. Miller estimates that there are 7,000 of these “shadow” units in Manhattan alone and more than 20,000 citywide."

Source: NYTimes

Investor Sentiment - Still Not at the Bottom

"Colliers International’s Investor Sentiment Survey reveals bottom of property cycle now imminent with upswing
predicted to be well underway by 2010. Property investors around the country believe Australia is now approaching the upswing point of the property cycle with the majority of investors believing the industry is currently between 4:00 and 6:00 on the property cycle clock (where 6:00 is considered bottom). This was the major finding of the inaugural National Investor Sentiment Survey conducted by Colliers International. Colliers International surveyed institutional and private clients across Australia to attain their sentiment on the current climate of Australia’s property market, and their views on the next 12 months. The investment calibre of respondents was exceptionally high with 42 percent stating the value of their portfolio was greater than $AUD1 billion. Felice Spark, Director of Commercial Research at Colliers International says the majority of investors believe we are now fast approaching, if not already at the bottom of the cycle, poised for upswing. “36 percent of investors surveyed believe Australia is currently at 5:00 on the property clock with a further 36 percent identifying either 4:00 or 6:00.”
Summary of key findings:
• 72% of investors believe we are between 4:00 and 6:00 on the Property Cycle Clock, poised for upswing
• Residential sector is the standout with values holding steady or possibly growing
• 63% said they were looking to buy property in Australia within the next 12 months"
Source: Colliers
So based on this survey, more than 60% of property investors think that things are going to get worse before they get better.

West End Residents Upset

" West End Riverside residents are fighting Brisbane City Council proposals to turn the former industrial area into a concrete jungle. Secretary of Regatta Apartments body corporate committee Paul Rees said residents of the new Riverside apartment buildings were stunned at learning the Council’s draft neighbourhood plan would allow 12 storey buildings in the area, when the current plan provides for seven storeys, while elsewhere in West End, 30 storey high rise buildings will be allowed.

“What Council is proposing is outrageous,” Mr Rees said. “The draft neighbourhood plan is a plan to wreck our neighbourhood.”

“It’s horrifying that the Council is planning to wreck the heart of West End, with five storey buildings planned for Boundary Street, Vulture Street and Jane Street, and 15 storey buildings on Mollison Street. This may mean windfall profits for the Council’s developer mates but it’s local people and the wider Brisbane community that has to pay.”

Riverside residents from the seven new apartment complexes, as well as residents from “old” West End, will meet at the Big Lizard in Boundary Street at 12.30pm on Saturday before walking en masse to the Council’s community consultation session at the Kurilpa Senior Citizens hall.

“New and old residents alike want to see the old industrial areas redeveloped but it has to be on a human-scale which protects West End’s village atmosphere,” Mr Rees said.

“Residents have made this clear to the Council through countless community consultations but the plan they’ve come up with ignores this input and betrays the community. It appears Council wants to crowd more than 25,000 extra people into the area – the equivalent of the population of Gympie. We want a vibrant, liveable, sustainable community and what they are trying to foist on West End will create concrete canyons, wind tunnels, overcrowding and alienation."

Source

Recent Brisbane Apartment Sales

• Admiralty Quays, Apt 164: 4 bedrooms, 3 bathrooms, 2 cars - $2,200,000
• Admiralty Quays, Apt 90: 1 bedroom, 1 bathroom, 1 car - $580,000
• 212 Margaret Street, Apt 47, 2 bed, 1 bath, 1 car - $465,000
• Willahra Towers, Apt 26, 2 bed, 2 bath, 1 car (76m2 internal, 36m2 external. Total area 112m2; white-goods included) - $435,000
  
• Parklands 3, Apt 4073: 1 bed, 1 bath, 1 car - $365,000
• Charlotte Towers, Apt 2305: 1 bed, 1 bath, 1 car - $354,000
• Casino Towers, Apt 3304: 1 bed, 1 bath, 1 car - $339,998
• River City, Apt 1005: 1 bedroom, no car, view straight into neighbouring building - $305,000

Sales in Felix

2 bedrooms:

• Floor 36, Apt 361 - $430,000 (April 2009)
  
• Floor 35, Apt 356 - $490,000 (January 2009)
• Floor 35, Apt 355 - $420,000 (October 2008)
  
• Floor 34, Apt 342 - $495,000 (October 2008)
  
• Floor 32, Apt 325 - $430,000 (March 2009)
• Floor 32, Apt 322 - $487,000 (February 2009)
• Floor 31, Apt 314 - $460,000 (June 2009)
  
• Floor 29, Apt 294 - $424,000 (September 2008)
• Floor 27, Apt 272 - $491,000 (May 2009)
  
• Floor 25, Apt 256 - $522,000 (August 2008)
• Floor 24, Apt 245 - $415,000 (July 2008)
  
• Floor 24, Apt 246 - $500,000 (October 2008)
• Floor 22, Apt 225 - $420,000 (September 2008)
• Floor 21, Apt 217 - $485,000 (Feb 2009)
• Floor 20, Apt 204 - $440,000 (Dec 2008)
• Floor 17, Apt 173 - $480,000 (August 2008)
• Floor 17, Apt 176 - $497,000 (July 2008)
  
• Floor 16, Apt 163 - $476,500 (Sept 2008)
• Floor 14, Apt 144 - $421,500 (Sept 2008)
  
• Floor 13, Apt 133 - $465,000 (Sept 2008)
• Floor 13, Apt 136 - $462,000 (Nov 2008)
• Floor 11, Apt 113 - $485,000 (Jan 2009)
  
• Floor 10, Apt 103 - $475,000 (Oct 2008
  

1 bedroom:

• Floor 29, Apt 291 - $340,000 (Sept 2008)
  
• Floor 24, Apt 248 - $333,000 (March 2009)
• Floor 18, Apt 188 - $335,000 (Dec 2008)

Apartment numbers ending in 1 and 8 are Plan B - 51 sqm internal
Apartments ending in 2 and 7 are Plan D - 77 sqm internal
Apartments ending in 3 and 6 are Plan E - 82 sqm internal
Apartments ending in 4 and 5 are Plan C - 62 sqm internal
Some floors have different configurations to this plan, including different sized balconies.

Admiralty

Photos of the Admiralty apartment precinct, on the Brisbane River. From left to right, the apartment buildings are Admiralty Towers Two, Admiralty One, Admiralty Quays and River Place. Note that Skyline and Macrossan are not river front building. Skyline is the gray building behind Admiralty One. Macrossan is still under construction behind Skyline and cannot be seen.

El Dorado Indooroopilly Update

"Thank you for your enquiry on apartments at the El Dorado Village. We are re launching the project on the 1st of September."

New Apartment Sales in Brisbane

Property market indicators including the "Colliers International Brisbane Apartment Report" indicate that the market for new units is stabilising in the Queensland capital. The report reveals that 207 new units were sold in Brisbane in the June 2009 quarter, up from 87 in the preceding three months

200 Apartments Sold At Hamilton Harbour

"After launching the first residential offering in early March, Hamilton Harbour joint-venture partners Leighton Properties and Devine have achieved their first major milestone – achieving 200 sales.

Selling out more than $100 million worth of apartments in just over four months is a triumph for the developers, which have attributed strong sales to the developments’ Hamilton location.

Devine National Marketing Director Ken Woodley says more than 80 percent of buyers are from Brisbane."

Construction has not yet commenced.

http://www.qbr.com.au/news/articleid/57924.aspx

Tennyson Reach Auctions

Two apartments went to auction today at Mirvac's Tennyson Reach. Both were 3 bedroom, 2 bathroom apartment on level 3. They have river and mangrove views.
See Apt 4108 listing and Apt 3205 listing.
For both apartments, there were no bids. Passed in.
This does not bode well for Tennyson Reach. So far, there have been no resales, even though there are about 30 apartments listed for resale. In addition, from what I can determine, between 15 and 20 apartments failed to settle.
When compared with similar quality apartments located in inner city areas, I would say these apartments are worth less than a million, but I am not a valuer. I suspect that the owners (who paid more than $1.3M) will take a bath if they sell.
A warning against buying of the plan during a boom.

Meriton's Brisbane Serviced Apartments

Meriton has nice drawings of its proposed new building in Brisbane, which will be near the Courts.

http://www.meritonapartments.com.au/default.asp?action=article&ID=21698

Vision - Austcorp

Austcorp, the group that was developing the Vision building in Brisbane, is in administration. You can follow the status of the administration here: http://www.briferrier.com.au/pages/company-information.php?id=14
It seems that we will find out at the end of September what happens next.