Pradella

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

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

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

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

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

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

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

Encore Toowong: Flooded

Tempo West End: Flooded

Left Bank West End: Flooded

Flow West End: Mildly Flooded

The Oracle - Update

SETTLEMENTS for the collapsed $700 million Oracle Broadbeach apartment project on the Gold Coast are likely to be delayed by the Queensland floods.

This is because Brisbane lawyers working on the contracts are unable to return to their flooded city offices, according to the receiver for the project. ... Since October, about 180 of those presales had settled after values of Gold Coast apartments typically fell by 30 per cent since the global financial crisis.

Source: The Australian

When the Water Recedes....

Extract from Brisbane Times article:

The flagging Brisbane property market was not forecast to make substantial gains in 2011. Optimistic forecasts pinned rises at less than five per cent. Property analyst Michael Matusik said the flood was a "game-changer", one that would place a hold on normal market conditions, but only temporarily.

He said the properties completely inundated in low-lying suburbs away from the river, including Rocklea, Oxley and Archerfield, would see a substantial decline in value, but only if they were put on the market before being totally restored.

Meanwhile, the value of the 850-odd exclusive riverfront properties would remain largely unchanged, he said.

"This property is tightly held and most owners are likely to renovate and stay put. Values along the Brisbane River, I don't think are likely to change much," he said.

Still a target

RP Data analyst Cameron Kusher believes future buyers would be motivated by "lifestyle choices" in suburbs including Rosalie, Paddington, Milton, Chelmer and Graceville.

"Buyers will still aspire to buy in these suburbs," he said. "I believe many residents will decide to stay put and rebuild their lives. If people do decide to up and sell they will be in the minority."

Immediately after the 1974 flood many cashed-up investors bought distressed stock, renovated and sold for massive profits after construction of the dam began, Mr Matusik said.

"It does involve risk, but [a risky] investment often means high rewards," he said.

Bargain buying

Mr Matusik said dwellings partially flooded last week, which were put on the market at a 15 to 20 per cent discount from 2010 prices, made for a wise buy.

"For fully flooded homes, discounts over 30 per cent would be worth looking at. This assumes that improvements are actually made, via physical barriers and improvement management systems to help alleviate future flooding."

Mr Molloy warned the financial sector's value of flood-damaged properties was yet to be determined.

However, Mr Matusik said he suspected interest rates would fall by 25 basis points in the coming months, "correcting the unnecessary hike last November".

Rental woes

The rental outlook for tenants and recently displaced flood victims is bleak. Up to 10,000 flood-damaged households are estimated to be looking for temporary accommodation. This combined with the annual influx of university students hunting for rental accommodation will surely push up rents.

"Those investors without landlord insurance might elect to sell their properties, which presents an opportunity for those willing to take a risk.

"A mass investor sell-off, however, could have a marked negative impact on values across the city, making [predicted rent rises] of five to eight per cent very bullish."

Sales to sink

The volume of sales is expected to decline, contrary to last year's predictions.

"The overly negative commentary about the flood's impact on property across the region is likely to batter confidence, which in turn could see inquiry and sales decline further," Mr Matusik said.

Yet Mr Molloy said buyers on the ground were expected to be forgiving.

"The outpouring of community spirit has restored a social confidence in our suburbs. People will remember that for many, many years to come," he said.

Yungaba and The Milton - Flood Issues

Yungaba is an off-the-plan development at Kangaroo Point current being built and marketed by Australand. The Australand Property Group informed the market yesterday that Yungaba would be delayed because of the floods. "That has obviously hampered progress on the project and the full impact is yet to be determined. First settlements are now expected in the first half of 2012 instead of the forecast second half of 2011".

I wonder what people will think of this project now -- I suspect sales may be a little slow for a while.

FKP said it suffered damage to its sales suite at Milton for its overpriced off-the-plan development "The Milton".

Analysts said Mirvac Group faced the risk of a slower sales rate because of the floods.

See also article in The Australian

Tennyson Reach Flooded

Extracts from Story from The Australian:

"Yesterday, as the smell in the luxury dwellings at Tennyson Reach, home to tennis greats including Ashley Cooper, rose with the temperature and humidity, owners wondered how the planning controls that were meant to regulate development could have gone so wrong.

Several said they were assured before buying that the ground level would not flood unless the Brisbane River reached a mark of 8.4m, well above the 4.46m at which it peaked last Thursday after a massive discharge of 645,000 megalitres from Wivenhoe Dam on Tuesday.

Between cleaning up and moving out yesterday, several owners said they needed explanations from Mirvac and the council about their true flood immunity and whether the development, completed less than two years ago, should have been approved, given its history of inundation.

The flooding at Tennyson Reach is one small part of a major problem for Brisbane City Council and the Queensland government, as the losses of owners, the liability of developers, and the policies of governments combine in a perfect storm of recrimination and confusion. The residential precinct went through all the council's usual approvals process after the Beattie government sought tenders to make something glorious from the site of the abandoned and obsolete power station.

Apartment owner Chrissie Buchanan, who bought in June 2009 with her husband, Sam, who is a quadriplegic, has had damaged floors, walls and cabinets. She said she was fortunate to have insurance and was in a lot better position than many in Brisbane.

"The things that have been damaged are easily replaced," Ms Buchanan said. "There are people who have lost their businesses and houses. I feel for people who are a lot worse off than ourselves."

She said flooding risk was "not an issue" that was canvassed when she and her husband bought the property. "You never believe it's going to happen to you," she said.

Keith George, who paid $2.25 million for his ground-floor apartment 18 months ago, said he had waist-level water throughout his property. As a result, he will have to rip up floors and carpets, rebuild walls, and most of the apartment's cabinets will have to be replaced. "I'm going to have to spend at least $100,000 to replace the cabinetry," he said. "We won't be back in here for months."

Mr George said the flood risk never came up when he was buying the property, partly because City Hall had approved the development.

"And I always believed the Wivenhoe would not let the Brisbane River come up," he said.

Another resident, Julie Savage, said most people living in the complex were not too concerned on Tuesday night when other parts of the city started to evacuate their homes.

"I got the impression everyone was relaxed because it could withstand a flood of 8.4m, so it would all be fine," she said.

It is not only residents on the ground floor who are affected, with those on the many levels above unable to return home because there is no power and no lifts working. "They were saying 12 weeks until they can return, but it might be eight," Mr George said.

...

Mirvac Development Queensland chief executive Matthew Wallace, who inspected the development yesterday, said the priority was to work with the body corporate to get the buildings reinstated, and "get peoples' lives and properties back together".

The flooding hit the apartments 12 hours before the peak in Brisbane of 4.46m. It is believed the body corporate does not have flood insurance.

Several owners who bought their apartments before the global financial crisis had looked for loopholes to litigate a way out of their contracts before settlement, but failed after filing actions in the District Court. The irony is that being misled over the level of their flood immunity might have provided a perfect exit.

After successfully defending itself against some residents' claims that it misrepresented the quality of the river views, as well as a host of technical legal arguments surrounding the contract documents, Mirvac said the original buyers had to meet, in some cases, hundreds of thousands of dollars in default interest and associated costs."

Mirvac Group said its Waterfront Newstead development had experienced some basement flooding, while its Tennyson Reach building had basement and ground floor inundation.

Mirvac added that the Brisbane floods were having a limited impact on its residential projects.

Do I Have To Pay Rent If I was Flooded?

I have been asked this question a lot. Do I have to pay rent if the property I lived in has flooded? The most common situation for apartments is that the basement has flooded, but that the apartment itself is ok. The tenant may have evacuated for a week, and there may be a loss of power.

Usually, the tenant can claim against the body corporate and its insurance for the tenant's loss in these circumstances.

The lease does not automatically end. If the lease remains on foot, then in these circumstances, the tenant must still pay the rent, but may try to negotiate a decrease in the rent for the effected period.

If the apartment is non-liveable, then the tenant may end the lease, move out and stop paying rent. If an apartment is without power for a limited period or without a carpark for a limited period, then the apartment is not non-liveable. The RTA says: "Where tenants have been ordered to evacuate their rental property, such as by emergency services, it may or may not be due to non-liveability as the premises may or may not be damaged and the tenant may be able to return to the property after evacuation. This will need to be discussed between the tenant and their lessor/agent. In such circumstances the parties may be best negotiating possible rent reductions, rather than ending the tenancy."

See RTA website.

There is compensation for tenants in these circumstances, of $1,000 per adult effected. See Centrelink.

Flood Building Update From Readers

212 Margaret Street still out of power, energex is talking about getting in a generator. Plus the lift shaft seems to be damaged so no go on the lifts either at the moment! No one can tell me when it will be up and running but it doesn't look good to be honest - apparently there was a lot of damage downstairs and a great deal of debris.

Riverplace Apartments maintained electrical power during the floods, so the basement carpark sustained only a few inches of water and no forced evacuation.

Admiralty Towers One - building evacuation still in force; at least 48 hours to occupancy. Lifts not working.

All services to Admiralty Quays have now been restored including all four levels of car parking in the basement.

Admiralty Two: There is still some water in the high rise lift well, and Kone cannot bring lifts into service until this water is completely drained. Owners who live in the high rise may use the low rise lifts to go to level 21, then use the fire escape to access their level. Our security guard will be on duty tonight. He has a fob for high rise owners to access level 21. Priority will be given to get at least one high rise lift operational tomorrow (Wednesday).

Water's Edge: The Developer has been working with us to clear the basements and this has nearly been completed. The cleanup in the basement should begin Tuesday 18/1/11. There is damage to the electrical boards that were located in the basement, however the repairs are expected to begin as soon as possible.

Emporium Valley: Operating normally with exception of Toulouse North Tower where power is yet to be re-instated and lift access restored. We are hopeful power will be back by Wednesday this week.

Oaks Festival Towers: Still pumping water from basement on Wednesday afternoon.

KoKo West End: Basement flooded and building evacuated

Left Bank, West End: Basement badly flooded

120 Mary Street: "Unfortunately due to flood damage the Quest River Park Central is currently closed. It is hoped to have the building back open by mid next week; however no date can be provided at this point. More information to be posted as it comes to us. "

Private property developer Mark Stockwell said the group's Riverpoint apartments at West End had water in the basement. The floodwaters did not reach the residential floors. "The water has now all been pumped out and there was some damage to the electricals, which is now being fixed."

More on the flood and property prices

The SMH had this story:

Floods Tipped to Hit House Prices

"House prices in Queensland are likely to sink as the financial effects of state's devastating floods strain household budgets and dent banks’ willingness to lend, a ratings agency has warned. ...

LJ Hooker Indooroopilly principal real estate agent Scott Gemmell said it could be 10 to 15 years before some flooded suburbs regain their popularity. ‘‘In the short period it probably scares me a little; what the flood will do to house prices,’’ he said. ‘‘In some cases, houses will be unsellable."

He said he expected a surge in property for sale listings later this month. Mr Gemmell said his office had been inundated with rental inquiries and had compiled a priority list for those affected. ..."

And a similar story: Queensland Rents to Soar, House Prices to Plummet

"... The news is also bad for tenants, with rents expected to soar in line with the surge in demand from displaced residents needing temporary homes. ..."

But, according to another story, landlords will go bankrupt: "Landlords across Queensland are likely to go bankrupt in the next few months, an industry expert has warned."

How will the flood impact property prices in Brisbane?

See this story from Bloomberg. Some extracts:

Property sales will slow significantly over the next month as residents focus on assessing damage and put purchase decisions on hold, said Rod Cornish, Sydney-based head of property research at Macquarie Group Ltd. Buyers are also likely to turn more selective about where they buy properties, avoiding low-lying areas that have been particularly hard hit, he said.

The property market in Brisbane will take some time to rebalance prices, said Gerard Baden, principal at a Century21 Australia real estate franchise in West End, a southwestern suburb of Brisbane that’s bounded by the river on three sides.

“If someone’s selling, what the neighbors’ house sold for last month wouldn’t matter,” Baden said. “And we’ll have a two-speed market. Those properties affected by water, and those that aren’t.”

Brisbane-based Ray White Group has seen “hundreds” of tenants evacuated from properties it manages in the state, said Tony Warland, Queensland chief executive officer for the group.

The Australia also has a story. Some extracts:

The floods are expected to further slash property prices in the southeast, with more than 26,000 homes in Brisbane damaged and the rebuilding process expected to take months. SQM Research managing director Louis Christopher said the residential market in the state's capital was already weak and would be damaged by the worst floods in nearly three decades.

Most property experts said yesterday that it was too early to estimate the exact effect on prices, but all agreed there would be a negative impact on values.

"The immediate impact is going to be that houses which have been impacted directly by the floods that require repairs will likely be taken off the market," Mr Christopher said.

"The floods are going to remind buyers of the risks of buying near the floodplains. There is the risk some of the most prestige areas are going to take a hit because buyers are aware of the risks now of buying there."

Some of the most affluent suburbs in Brisbane -- New Farm, West End, St Lucia, Indooroopilly, Graceville and Chelmer -- have been the most severely affected by the floodwaters. Residex managing director John Edwards said the higher-priced areas would suffer a greater price hit compared with flooded suburbs in Brisbane's outer west and close to Ipswich.

"I think we are going to find that the big pricing adjustments will be the higher-cost areas that are along the river's edge," he said.

Property consultant Michael Matusik agreed in this story that the prestige riverfront market would recover fairly quickly, but said the markets most affected would be low-lying suburbs close to the river that were flooded.

HiDef Aerial Photos of Brisbane 2011 Floods

NearMaps took hidef aerial photographs ("photomaps") of the 2011 Brisbane floods on 13 January 2011. Some examples:

• Tennyson Reach
• Parklands Sherwood
• Regatta area
• Encore and Fresh apartments at Toowong
• Macquarie Street, St Lucia
• Waters Edge and Flow
• SL8, Tempo and LeftBank
• Vue
• SouthBank
• Admiralty precinct

Brisbane Floods

With the flood water going down, the clean up is starting. Many Brisbane apartment buildings were impacted by the floods -- basement carparks full of water and mud; no electricity; residents evacuated.

Some of the buildings that have significant water in their basements include:

• Admiralty Towers
• Admiralty Two
• Admiralty Quays "we only had minor flooding in the lower level of the basement (about 50cm deep)"
• Riverplace
• Riparian (access tunnel to carparks - carparks are above ground level)
• Felix
• 212 Margaret
• Festival Towers
• River City
• Vue at Milton
• Water's Edge
• Flow
• SL8
• Parklands Sherwood
• Fresh Toowong
• Encore Toowong
• Arbour on Grey at South Bank
• Tennyson Reach
• Most apartments on the river at St Lucia
• the list goes on

Pradella writes about Parklands at Sherwood: "Sadly this site has experienced quite a lot of damage. The Outlook – which are the entertainment facilities has been completely submerged by water. The car park under Jacaranda and Brookline is also completely submerged. Whilst floodwaters did not reach the interior of the apartment buildings, it did however breach a number of houses and townhouses. The entire complex was evacuated late on Wednesday afternoon. Power has been cut and access to the property restricted."

and about Waters Edge:

"There has been significant damage to the pool and the grounds however the water from the river has NOT entered the building. The car park under the building has flooded, and all residents evacuated. Power has been cut."

Admiralty Towers has it status (current evacuated) on its website.

I am amazed that the Council allows buildings to be built with basements that flood, forcing loss of power and residents to be evacuated. See also this article.

I am not sure how the floods will impact property prices in Queensland. After the 1974 floods, the prices of impacted houses decreased for a period. There will be a shortage of rental accommodation, as many people are looking for places to live. Foreign press is reporting on its nationals being evacuated -- see for example, this article from Singapore and Malaysia -- and QUT and UQ were flooded, which will not be good news for those trying to attract foreign students to Brisbane.

On the positive side, it could have been much worse. Only one person died in Brisbane, and the flood levels were lower than initially expected.

Photo

Nice photo of Brisbane skyline in the fog here:

Photo

Values Down, Rents Up?

This is an extract from an article from a News Corp paper, written by a researcher at RP Data:

"QUEENSLAND'S residential property market is in the doldrums and faces a grim 2011, with house prices likely to grow so little this year they won't keep up with inflation. Despite this fall in real terms, interest-rate rises will force many first-home buyers out of the market.

From the end of 2007 to October last year, Brisbane home values increased according to the RP Data-Rismark Home Value Index by a total of 3.8 per cent. In the period December 2007 to September 2010, the Australian Bureau of Statistics' consumer price index showed that prices (or inflation) had increased by a total of 8 per cent.

As a result of home values growing at a slower rate than inflation, in real terms, property values have fallen by 4.2 per cent since the end of the city's last strong value growth period in 2007. In the next 12 months, I expect that property values will be pretty much flat suggesting that once again in real terms Brisbane homes will record a fall.

Although this might seem like great news for those looking to enter into home ownership, in reality interest rates are at much higher levels than they have been in recent times. The result will be that the cost of servicing the debt on a mortgage is now much higher, and for first-time buyers it will be more difficult to enter the market.

The bad news is two-fold for those unable to buy their first home. We are expecting rental growth to return to the Brisbane market this year. While property values have not grown in real terms since 2007, the low-interest-rate environment during 2008 and the First Home Owner Grant boost lured many out of the rental market and into home ownership. As a result of these conditions rents have been falling since the start of 2008. With property value growth likely to be flat, interest rates at above average levels and possibly increasing further, and Queensland's building approval numbers still disappointing, we expect that competition within Brisbane's rental market will intensify.

With limited new stock coming on line, demand for existing stock is likely to increase, particularly in inner city suburbs. As a result, landlords are likely to have increased scope to lift rents. At RPData we expect property values to fall in real terms, but it is likely that during the year rents will increase in actual and real terms.

This may be the case in Brisbane, but don't expect the same conditions outside the capital. Limited demand, a rental oversupply in some areas and the lacklustre performance of the tourism sector are likely to result in falls for rents and values in real terms."

Source

Happy New Year From Australian Banks

The Midtown

Demolition has started for a new apartment building at 127 Charlotte Street, directly opposition Charlotte Towers. (Charlotte Towers is being surrounded - don't buy in Charlotte Towers for the views!) The building is called The Midtown, and will consist of studio, one and two bed apartments.

Queensland Property Market Very Weak

"A NEW year will not necessarily bring renewed confidence to the southeast Queensland property market, with predictions it will struggle for at least another six months.

Economic forecaster BIS Shrapnel expects little price growth even if turnover increases. Senior project manager Angie Zigomanis said that while other states had seen a pick-up this year, Queensland's market was still very weak.

"The Queensland market collapsed a little later than other states, so it was natural it would take longer to bounce back," he said.

Property analyst Michael Matusik believes there is no end in sight for Queensland's property market slump, which is stuck in a buyer's market. He predicts sales will decline, properties will take longer to sell, there will be little or no price growth, and there will be slight falls in value during the year.

...

Mr Zigomanis predicts the first interest rate rise will be about June, and the second in the December quarter. He also believes investors may decide to re-enter the market towards the end of 2011.

Despite advertised stock levels falling away in the usual Christmas slow down, the total number of properties on the market was still 20 per cent higher than in 2009.

Australian Property Monitors predicts homebuyer activity to remain restrained in most markets early this year, with potential price growth by mid-year.

Its annual state-of-the-market report found that while Perth and Sydney would see strong price growth next year, Melbourne, Brisbane and Adelaide would experience more modest growth."

Full Story

Off-the-plan sales are slow

SALES of new highrise apartments took a dive in the past quarter with Brisbane levels the lowest they have been in 18 months and the Gold Coast drastically down.

In Brisbane, there were 133 unconditional sales of new highrise apartments in the quarter to the end of November.

See Courier Mail

Capital Growth

In December's Australian Property Investor magazine, there is a chart from Collier's that lists average capital growth and average hold years for certain Brisbane apartments, as at August 2010. The capital growth period and methodology to produce these figures is not disclosed:

Casino Towers - 5.9%, 3.7 years average hold

Aurora - 5.4%, 3.6 years average hold

Felix - 5.25%, 3.8 years average hold

Quay West - 4.9%, 5.1 years average hold

Festival Towers - 2.3%, 3.9 years average hold

M on Mary - 1.1%, 2.9 years average hold

Charlotte Towers, 0.9%, 3.5 years average hold.

My guess is that the hold period is calculated from when the off-the-plan contract is signed, not when settlement takes place.

Off-the-plan investors in Devine's Festival Towers and Charlotte Towers have clearly lost money. A word of warning for investors in Devine's Hamilton Harbour. Devine's Casino Towers has done ok, but that is unlikely to be repeated now that Jupiters is building a massive hotel across from Casino Towers that will block much of this buildings river views (but not the western sun). Out of this group, my pick would be Quay West -- only 132 apartments, with a long hold period and good capital growth, never to be built out views.

Differences in Apartments

A recent Adjudicator's decision regarding Admiralty Towers II highlights a factor that buyers and valuers sometimes overlook -- that is, some apartments have different rights and facilities than other apartments in the same building. In Admiralty Towers II, there are two swimming pools -- a lower pool and a pool on the top floor. Each pool also has a gym. The top floor pool also has a roof sundeck.

The bylaws of the building state that the owners of lots 126 to 193 may use both pools and gyms. The owners of lots 1 to 125 may only use the pool and gym on the lower floor, and cannot use the top floor pool, gym or sundeck.

A resident challenged this bylaw. The challenge failed. These kind of bylaws are not unfair or unreasonable. See Ref 0915-2010 issued 23 December 2010.

Thus, the value of an apartment on a higher floor should be more than a similar an apartment on a lower floor -- not just because of the views, but because the apartment has access to more facilities.

The moral of the story: when buying or renting, check to see if any apartments have access to exclusive use facilities. Make sure you are doing a like for like comparison when looking at recent sales data.

Ray White Market Update

I received a Ray White CBD Residential Market Update this week. Some extracts:

• "we also have 37% more properties for sale so buyers have more choice"
• "The inner city unit market continues to be popular..."
• "While there is an increase in the number of listings, there is no evidence of an oversupply of units in the marketplace."
• "Projects that are going ahead are price targeted toward the lower end of the market."
• "there has been an abundance of rental properties available so far this year in the Inner City causing the vacancy factor to over around 4%" (compared to Sydney and Melbourne at 1.2%)
• "Another factor is the rapid fall off of overseas students coming to Brisbane to study."

Ray White also reports that 91% of the properties that it auctioned this year sold, with an average of 61 days to sell. This compares with private treaty sales being 50% sold within 80 days. Doesn't sound like auctions are a fast way to sell. And 80 days time on market for private treaty is very bad -- and half of the properties listed for private treaty don't sell!! Not a good market for sellers.

Tips for 2011

Here are my tips for 2011 in relation to Brisbane apartments:

1. If you don't have to sell, don't sell. Wait until 2012 if you can to sell.

2. If you have to sell, don't sell by auction.

3. Don't buy off-the-plan.

4. If buying: Focus on good quality apartments in good locations. A cheap apartment in a less than desirable location is not a good investment.

5. Don't take risks.

The Oracle - Big Losses

INVESTORS who bought into the $850 million Oracle Broadbeach development on the Gold Coast have taken losses of up to $1m.

Receivers of the company behind the failed project are vowing to pursue legal action over the unsettled 200-odd apartments in the two-tower complex, once promoted by author and former model Tara Moss.

One Oracle apartment owner said he was aware of people who had settled on apartments located on the 44th floor for $3.5m and had since sold them for $2.5m.

Michael Kuhne said his late wife bought one of the three-bedroom Broadbeach apartments off the plan for $2.4m, and it was yet to settle.

He tried to sell the property last year, but there were no buyers. "I am trying to get rid of it and can't," he said.

KordaMentha announced on Thursday night that South Sky Investments, the Niecon-related company behind the Oracle, had been placed into voluntary receivership by director Michael Nikiforides. The Broadbeach project was highly leveraged with several financiers, including the National Australia Bank, sources said.

Queensland property analyst Bill Morris said the number of new high-rise apartments for sale on the Gold Coast had almost halved to about 750 in the past year, and the volume of sales for the three months to November was the lowest level since 1981.

"Things improved for a while, but the Gold Coast in particular has died. There is a general expectation in the market that prices could still fall," he said.

The two 40- and 50-storey Oracle towers have 505 apartments, a five-star hotel, shops and commercial office space and are among the tallest on the Gold Coast.

It is the second Niecon-related venture to fail this month after the company linked to the Nirvana By The Sea residential Gold Coast project, Kirra Beachfront Investments, was handed over to its financier.

Attention is turning to other luxury apartment towers on the Gold Coast, such as Juniper's Soul, a Surfers Paradise luxury apartment project, which settles at the end of next year, and the Hilton Surfers Paradise Hotel & Residences, which is also settling next year.

Source: The Australian

2010 Brisbane Apartment Awards

These are our awards for 2010:

1. Wildest Advertising Claim

FKP Properties wins this for their overpriced The Milton development. Their sales agents are giving out printed information to potential investors about future property values. They have a sheet of paper showing investment returns for a 2 bed, 1 bath apartment listed at $650,000. The prediction is that this apartment will be worth $807,500 on completion of the project in 2013, and will be worth over $1M by 2016. The predicted rent is over $720 a week in 2013.

2. Worst Investment

This is a hard one. Many investors who purchased off-the-plan in 2006 or 2007 had to settle this year. Some were unable to get bank valuations anywhere near settlement. The contenders for this category are:

• Mirvac's Tennyson Reach
• Niecon's The Oracle at Broadbeach
• Raptis' The Hilton Surfers Paradise
• Evolution.

I think they are all bad investments, so maybe a four way tie!

3. Biggest Delayed Development

Again, a number of contenders for this category. There are many big developments that have been delayed indefinitely -- Trilogy, Evolution, Empire Square, FKP's Albion Mill. South Point is another contender here -- although it looks about to finally begin.

But the winner is El Dorado at Indooroopilly. Construction has been about to start for years now. What is going on at this development?

Which way is the market heading in Brisbane?

RP Data reports low auction clearance results for Brisbane for last week:

APM reports the following top sales for Brisbane City apartments (in the 4000 post code) -- which may not be accurate: