Oversupply of Brisbane Apartments Coming?

BIS predicts an oversupply of apartments in Brisbane beyond 2014.  See article.  There was a similar story in the AFR on Monday, 11 February.   In my view, BIS' predictions often don't come true.  In March 2008, BIS predicted that the Brisbane market would perform the best.  Wrong.  In August 2008, BIS said there would not be a big decline in prices of Brisbane real estate.  Wrong.  So why should their most recent prediction be any better?  How can BIS accurately predict demand for apartments in Brisbane in 2015?  See also this prior post.

No Capital Growth for Brisbane Property

As reported by RP Data, on an average annual basis over the past 5 years, Brisbane has not had capital growth in property values.   Taking into account stamp duties and other transactional costs, the losses would be even greater.  It would have been better of investors, on average, to put money in the bank.

Brisbane Real Estate Market Summary

The Brisbane real estate market is still about 10% below its peak.  And sales volumes are still down.  I guess that means that there is room for improvement.

Canvas South Brisbane

Pradella is selling Canvas in South Brisbane.  It is about to commence construction.  Some advertised pricing:

• Apt 1505, 2 bed 2 bath, 75 sqm internal - $710,000
• Apt 307, 2 bed 2 bath - $595,000
• Apt 508, 1 bed studio, no car, 44 sqm internal - $346,000

Sounds very expensive to me, for this quality product in this location.

For example, this 90 sqm internal apartment, a high quality Mirvac apartment, in a much better location is being sold for "$580,000 plus".

The Midtown

The Midtown, on 127 Charlotte Street, has opened, as a short stay "hotel".  See its "apartment hotel" website.  According to the Place Report, see post below, 47 of the 144 apartments have sold.  According to Booking.com, there are 142 apartments (so I guess two are being used for the onsite manager).  According to RP Data, 28 apartments have settled, but this is often a month or two out of date due to the government updating its records.  The unsold apartments are being marketed with a 5% rental guarantee for 2 years. The apartments are very small, so that may explain why there are a number of buyers from China.  A number of the apartments appear to have been purchased by owner occupiers, or at least the purchasers have given the apartment they purchased as their address.  As the comment for the Place Report notes, I also wonder how a hotel can operate with so few rooms?

Festival Towers

I visited Festival Towers recently for an open house.  The building and common facilities are looking tired, the apartment looked worn out, and there were a large crowd of tourists in the small lobby area.  The building is used as a "hotel" by Oaks.  It is a building that is popular for touring escorts.

Values are not holding up.  For example, apartment 3607, on a high floor, has 2 bedrooms 2 bathrooms.  It was sold off the plan in 2006 by Devine (now running Metro Property Group) for $530,000.  It was resold in late December 2012 for $455,000.

The apartment next door, apartment 3608, sold off the plan in 2006 for $546,000.  Two beds, two bathrooms, 2 cars, 103 sqm.  It resold in early December 2012 for $485,300.

Either a good building for bargains, or a building that has long term problems, depending on your view of the world.

End of the Down Cycle

If this chart from RP Data of past performance is any basis for predicting the future, then property values in Australia will start to rise again.  But note from the chart that in recent times, there have been more declining quarters in recent times then 10 to 15 years ago.

Stelvio Windsor

I received an email from an agent recently who is marketing a new apartment development at Windsor, called Stelvio.  It is a 33 apartment complex.  A colourful brochure (which includes a nice picture of a bird) is here.

The Stelvio complex has two buildings, one with an elevator and the other building is a walk-up.

Two bedroom two bathroom apartments are 85sqm internal, and with the balcony, the total floorspace is 99sqm.  The pricing is $520,000 to $550,000 with 1 car park.  An extra $40,000 for two car parks.  Estimated rents are $475 a week.

This seems to be a very bad investment to me.  But it is being pushed by financial advisors.  According to this website, the project was launched in August 2011, but not year sold out.  (I wonder why?)

Compare Stelvio to an existing apartment complex, not in Windsor (because there are few larger complexes in Windsor) but in Indooroopilly, which in my view is better located.  The complex I selected for the comparison is Ciana, which is about 3 years old, and has a pool and a gym, and a track record of full tenancy occupancy:

Apt 56 in Ciana is for sale, 2 bed, 2 bath, 2 car parks, 89 sqm internal, 109 sqm total, being listed for sale at $495,000, rented at over $520 a week.

Compare Apt 56 to Stelvio.  The apartments are a similar size, but the balcony in Ciana is double the size.  The rent in Ciana is greater.  Stelvio's pricing with 2 car parks is at least $560,000, more than $60,000 more than Apt 56 in Ciana.  Why pay more for a smaller apartment that gets less rent?

Or compare Apt 29 in Ciana, 2 bed, 2 bath, 2 car parks, 164 sqm total area, being sold furnished for $595,000, rented at $750 a week.  Or this apartment, for $450,000.  Or this?

It doesn't seem good value or good financial sense to buy a new Stelvio apartment when comparing it to an existing newish apartment.  So I wonder why financial planners are pushing Stelvio?

Yet Another Milton Development

Following on from FKP's The Milton and Walker Corporation's neighbouring development, there is now Savior Faire Residents at 27 Manning Street.  It will have 65 apartments over 14 levels.  One and two bedroom apartments.  Seems like a lot of new apartments, but with no new facilities planned for the  neighbourhood.  The old character houses in this area are slowly being replaced by high rise.

Walk Score

An interesting website to rate whether a property is located close to amenities is WalkScore (update:  new link:   https://www.redfin.com/how-walk-score-works.  For each address, the site will give you a score between 1 and 100 as to walkability.  Using the StreetSmart Walkscore feature, you can see what routes to take and what types of facilities are nearby.  Here is an example for an apartment complex in Sherwood.  A generalisation: The higher the walk score, the better the location of the property.

Place Projects Apartment Report

Place Projects have released their December Quarter 2012 report on the development and sales for new apartment projects in Brisbane.  The report can be viewed here.  The report looks at 46 different city and inner city apartment developments currently being marketed and sold.  Of these, only 3 are in the downtown CBD area.

Some extracts from the report:

Through the longer term, a ten year period, the average number of unconditional new and off the plan sales has been 307 transactions for the Inner Brisbane marketplace. After five consistent periods whereby quarterly sales for new and off the plan projects were well above this long term average, the December Quarter 2012 saw a slight softening to only just fall short, registering 274 unconditional transactions.

• A weighted average of $524,544 was recorded during the December 2012 quarter. This result represents a high percentage of one bedroom sales for the quarter and continues the trend recognised through the past three years of an elevated demand for this stock, that is high yield in the short term with the prospect of capital growth as the market recovers. 

• Inner Brisbane supply tightened slightly during the December 2012 quarter. A total of 1,713 new residential apartments remain for sale across the Inner Brisbane market. Given the softening in sales rate recorded during the September quarter, this translates into a relatively unchanged monthly supply of just over 13 months.

Apartments v. Houses

"With the release of the RP Data-Rismark Home Value Index results earlier this month, we also received the updated information on median selling prices of homes over the three months to January 2013.  This data revealed that the gap between selling prices of houses and units reached a record high over the first month of year."

See RP Data Blog

"Dwelling approvals data which was released by the ABS earlier this week shows that developers are beginning to look to develop a much greater number of units than they have historically. Throughout 2012, 90,144 detached houses were approved for construction and 61,042 units were approved. In comparison to the number of approvals throughout 2011, house approvals have fallen by -4.4% whereas unit approvals are up by 6%."

 See RP Data

River Point on Ferry and Flow

Stockwell is marketing 50 new apartments at West End, in its River Point development, called River Point on Ferry.  Prices range for $560,000 for a 1 bedroom apartment up to just under $2M.

Nearby, Pradella is marketing apartments in Waters Edge, which has been completed but still has unsold developer stock.  Apt 1606, 2 bedrooms, is listed at $619,000.  Apt 2209, 2 bedrooms, is listed at $699,000.  Apt 1111, 3 bedrooms, is $929,000.  A neighbouring development by Pradella, Flow, also has developer stock for sale.

Rental Demand Strong, says REIQ

Extract from REIQ Press Release:

Demand for rental properties remained strong across Queensland during the last three months of 2012, according to the Real Estate Institute of Queensland (REIQ).  Results from the REIQ December vacancy rate survey, released today, found that rates remained tight during what is historically the lowest period for rental demand annually.  REIQ CEO Anton Kardash said Queensland’s rental market had been a story of more demand than supply throughout 2012.

“As the year progressed, it became apparent that the continued robust demand for rental properties was not going to ease anytime soon.  While sales in the property market did begin to improve in the second half of last year, the removal of the First Home Owners Grant in mid-October resulted in a large number of would-be home buyers remaining in the rental market at the tail-end of last year.”

According to the latest Australia Bureau of Statistics (ABS) housing finance figures, the numbers of Queensland first home buyers slumped 33 per cent between October and November last year.

At 2 per cent, the REIQ figures showed that Brisbane’s vacancy rate remained well under the level of a balanced rental market at the end of December. 

Macquarie Capital's View different to HTW's view

The AFR this week quoted Rod Cornish from Macquarie Capital.  "Mr Cornish expected prices to track sideways in Melbourne for longer, while he said Brisbane prices have not yet bottomed."

In contrast, Valuer Herron Todd White's recent report says that the Brisbane property market is at the beginning of recovery, and has passed bottom.

HTW's report also says:

"If you are a unit buyer we will flog the proverbially expired filly – second hand, good size, ready rentable units as close to the CBD as possible or with good transport links won’t hurt you. It’s exhausting to repeat this advice but they offer great value as long as there are no likely body corporate maintenance and repair surprises coming along.

For new unit buyers the value is in finding some quality mid-rise projects in good locations. The value comes in not just looking at the figure on the page but by actually gazing upon the bricks and mortar itself. Quality fittings, a reasonable living space, facilities close by and all the things that would make owner occupier want to live there as much as tenants. Don’t get too caught up in the hype – shop around! A 1- bedder in the heart of the city is still available for those in the $300,000 price point if you don’t have a car. If the luxury of a carspace is required, maybe $320,000 is all that’s needed after a good search around.

For those at the upper end of the market the joy is limited. The days of easy money are truly behind us so you need the cashflow to service the debt if you’re going to borrow. Quality property is tightly held and the number of buyers able to fork over big dollars appears limited."

School Districts Impact Property Prices

Most people don't realise that many of the good public schools in Brisbane are districted, with enrollment management plans.  A property inside a specific school's catchment area many be worth more, and sell/rent more easily, than a property nearby outside the catchment.  A story in today's paper makes this point, as does this prior post.

See EQ Website for further details.

Capital city dwelling values rebound in January, largely driven by gains across the Brisbane, Sydney, and Perth markets

From an RP Data press release:

Home values across Australia’s capital cities were up 1.2% in January, taking the annual movement in dwelling values back into the black with a 1.8% increase over the past twelve months.  Dwelling values across Australia’s combined capital cities recorded a 1.2 per cent improvement over the month of January, negating the -1.2 per cent drop in values recorded over the final quarter of 2012.

Since bottoming out in May 2012, dwelling values across the combined capital cities have recovered 3.1 per cent.

The year on year results have now moved firmly into positive territory, with capital city dwelling values 1.8 per cent higher over twelve months ending January 31st.

Every capital city, apart from Melbourne (-0.4 per cent), has recorded an increase in dwelling values over the past twelve months. The gains in January were mostly focussed within the Brisbane, Sydney and Perth markets where values were up 2.0 per cent, 1.8 per cent and 1.7 per cent respectively.

According to RP Data’s research director, Tim Lawless, housing market conditions have started the year on a strong footing. “These strong January results are likely to have seen some upwards seasonal bias, however the housing market has been on a clear recovery trend since June last year. Capital gains aren't likely to remain this high over the coming months, however we are likely to see the recovery trend continue through 2013.  Despite the improving market conditions in January, dwelling values across the combined capital cities remain 4.6% below their 2010 peak. The latest housing market data adds weight to the argument that interest rates may be at the bottom of the cycle. The Reserve Bank will be watching the performance of the housing market closely, and the positive trend in housing values will dampen calls for further interest rate cuts,” Mr Lawless said.

Brisbane apartment prices (to 31 January 2013):
January 2013 - up 4.4%
Quarter - up 3.8%
Year on Year - up 3.2%
Median price based on settled sales of Brisbane apartments over the quarter - $350,500.

Capital Loss in Meriton's Soleil

Take care when buying off the plan!  At present, Meriton is marking Infinity, a tall apartment tower in the Roma Street area of Brisbane City.  Let's look at an example of an investor in Meriton's prior apartment tower, Soleil.

Apartment 6003 was purchased by a Sydney investor in September 2010, off the plan, for $640,000.  It is a two bedroom apartment with study, on level 60.  None of the apartments in Soleil (or Infinity) have balconies.  The apartment is 93 sqm, a good size, but faces West.

This apartment has been on the market for a number of months.  Ray White now has it listed for sale, at $575,000.  With stamp duty and agent's fees, a capital loss of at least $80,000 or more than 10%.

This is what Ray White says in an email:

Unit 6003/501 Adelaide Street, Brisbane – 2 bedrooms, 2 bathrooms, study, 1 car + storage
Please see below links to the property internet listing along with a link to the floor plan:
6003/501 Adelaide Street, Brisbane - Internet Link
6003/501 Adelaide Street, Brisbane - Interactive Floor Plan Link
This property is open for inspection today 2^nd February 2013 from 1:30-2pm. 
We also have another property on the market in Soleil, Unit 4803/501 Adelaide Street, Brisbane which is a 2 bedroom, 2 bathroom apartment with a study and 1 car space. 
At the end of 2012 we sold Unit 5204/501 Adelaide Street, Brisbane for $570,000 [the vendor had paid $540,000] along with many other sales within the Admiralty Precinct throughout the year.
We currently have buyers that are interested in acquiring quality properties within the Soleil and the Admiralty Precinct.

Admiralty Quays - Apartments for Sale

It is rare to see apartments for sale in Admiralty Quays, one of the better buildings in Brisbane downtown.  It is a quality building, with direct riverfront and a fantastic riverfront pool.  Some of the two bedroom apartments are smaller than the other Admiralty buildings, but they are still a quality product.

Apartment 68, two bedrooms, is listed for sale for $815,000.  See also here listing this as a deceased estate sale.

A three bedroom apartment is listed for sale for $998,000.

There are a number of apartments for rent, with two bedroom furnished apartments listed for rent at $815 a week.

Gold Coast Bottomed!!

After a recent auction, Ray White Gold Coast is saying positive things, yet again, about the Gold Coast property market.  In every press release that I have seen over the past 10 years from Ray White Gold Coast, they appear to be saying that now is the time to buy!   Always optomistic.

When I visited the Gold Coast recently, it looked old, tired and tatty.  It is not a nice resort town.  Even if the prices halve again, I would have trouble buying on the Gold Coast.  (Another recent story:  Brisbane residents prefer to vacation in Melbourne rather than the Gold Coast!)

From Fairfax:
The value of some homes on the troubled coastal strip have halved since 2007 and data from Australian Property Monitors shows the median house price in Surfers Paradise fell 33 per cent in a year. Apartment prices dropped 5 per cent. Property can sit on the market for months – even years. While it was still too early to be talking about recovery, Sunday's result showed that prices had stopped falling, he said. "I've got no hesitation in saying the market has bottomed," Mr Bell said."
See Fairfax

An agent's view on inner city apartment rentals

"There’s now fewer rental homes in our CBD than we had in 2006, according to new data on Brisbane’s housing market. The Residential Tenancies Authority stats for the December quarter show our CBD rental pool shrank yet again.

The RTA track all rental bonds and in Brisbane CBD and Spring Hill the total has reduced by 700 since its 2007 peak. For example for the full year 2012 the rental pool in postcode 4000 grew by a miserly 3 homes, despite the completion of Adelaide Street’s “Soleil Tower” with 464 apartments.

And there’s no large additions to the rental pool on the horizon.  There’s just one big tower under construction in the CBD but it’s a long way from completion. So we’d expect it’s going to be well into 2014 before we see any worthwhile increase in supply.

Despite this we haven’t yet seen any big jumps in rent and 2012 finished with a modest 3% growth in Brisbane’s rents. Our team [at Bees Nees] and other real estate agents are reporting a busy January market and we’re overall optimistic.  But renewing tenants are generally not agreeing to big rent increases and rent affordability remains top of mind. Inner city tenants do often move further out to save money. Landlords are still cautious too and they don’t want to risk a vacant home. So it looks most likely that 2013’s rent rises will be steady.

As a sidenote we often see new apartments being sold off-plan with forecast rents that must have some large increases expected on today’s rents. ‘Ambitious’ might be the polite way to describe some of their estimates. Let’s hope those investors do their homework."

Extract From BeesNees Real Estate Blog

Cheaper to buy than rent

There was a story in the AFR yesterday (page 7) with the headline "Cheaper to buy than rent". However, take care with such stories. First, it is based on a report by a mortgage broker, that wants to encourage people to buy and take out loans. Second, it uses average loan sizes and average rents, and so does not compare apples with apples. Third, it does not take into account rates, water fees, body corporate, stamp duty, maintenance or insurance. The article says that it is $800 a year cheaper to buy in Brisbane, but once these additional costs taken into account, it is clearly cheaper to rent than buy even on these misleading figures.

Two Bedroom in Park Avenue

Is this Brisbane's most expensive two bedroom apartment?  It is in the Park Avenue building at South Bank (which is on a 99 year leasehold).  Only $1,195,000!  There are no internal photos, and it is unclear how big this apartment is, or on what floor it is located.  And there is no open for inspection.  (Is this a real listing, or a joke?!?)

Radius Apartments

The developers of Radius Apartments at Woolloongabba recently announced that they have sold the management rights to Oaks Hotels and Resorts.  In my opinion, this is a good reason of itself to avoid Radius.  Two bedrooms including furniture from $465,000.  Settlement expected in about 18 months.  The Radius website has floor plans, but does not give the size of any of the apartments, so I am guessing that they are tiny.

Infinity Tower Grows

The Courier-Mail has learnt Meriton has since last March been seeking permission from the Federal Department of Infrastructure and Transport to operate a crane at a height of 311m for two weeks during the ongoing construction of the 81-storey, 262m Infinity tower in Herschel St.

In spite of the 10-month wait, Meriton said the project remained on track for a November completion and the developer remained "confident the application will be approved in the near future".

Courier Mail

Investing in Brisbane Apartment

The 2nd edition of "Investing in Brisbane Apartments" is now available in the iTunes iBook store, and can be downloaded for iPads, iPods and iPhones.  Look here.

Rising Market?

Matusik says that the Brisbane property market is on the upswing.  See presentation and blog post.

"The astute investor – and contrary to what the mass media says – knows that the property market cycles and that it turned the corner around the middle of last year.  The table below outlines the past eleven residential cycles in Australia.  Things might be slow, but they are looking up."

RP Data end of 2012 review

Here are some slides from RP Data's recent end of year review.  Click on slides to mark larger.

Renting in Brisbane

Introduction

At this time of year, finding a good apartment or home unit to rent in Brisbane is not easy.  In January and February, the demand for apartment rentals is high and many tenants are looking for a place to live.

In the best buildings, the existing tenants do not often leave, and when they do move out, the apartment is often snapped up quickly. For the better buildings, a large percentage of the apartments are occupied by the owner, and so are not rented out.   Also, onsite managers often control the rental rolls, and don't often advertise on the usual property websites (as they don't need to do so).  Some have their own website.  Also, onsite managers may have a relationship with executive relocation services, and the better apartments may be provided to corporate tenants.  For the mid-quality buildings, many apartments are furnished and rented on a short term basis, sometimes even overnight.  Thus, there may be fewer than expected apartments available for rent. 

The largest number of listings are located on RealEstate.com.au, but a number of onsite managers do not use this website.  A newer website that has a number of rental listings is the REIQ website.  CityApartmentSales is sometimes used by onsite managers to list apartments for rent.  Also, try Central Apartments for rentals in Pradella buildings.  Domain.com.au is used by real estate agents and private owners, and so may have properties listed that are not listed elsewhere.

At one time, a good specialist website for apartments was www.seqrents.com.au However, it seems that some buildings are not using this site anymore, or are not bothering to update their listing on this site. So, although useful, it is less useful.

You have to find out how each manager advertises his/her vacancy.

Generally, in my opinion, you want to avoid any buildings managed by Oaks, as they focus on short term hotel style rentals.

This website has a list of most city apartment buildings, with useful information and links about them. Also, try this customised search engine.  And see www.apartmentreviews.com.au.

You can also look at prior posts on this blog regarding rentals.

Downtown Brisbane:

If you want to live downtown, then I recommend the Admiralty Precinct. This comprises three first-tier buildings (Admiralty One, Admiralty Two and Admiralty Quays), plus River Place and Skyline (second tier).  Recently opened just behind these buildings is Meriton's Soleil (in my opinion, lower quality).

Admiralty One is good value, and has some of the largest two bedroom apartments in Brisbane, and is a smaller building.  It is direct river front - http://www.admiraltyone.com.au/

Admiralty Two also has good sized apartments, and the building has great facilities. http://www.admiraltytwo.com.au/

Admiralty Quays is newer, and has a great pool, but the apartments are smaller than the two Admiralty buildings listed above, and it is more expensive. http://www.admiraltyquays.com/

Nearby on the river in the city is River Place, and is likely to have availability as this is a large complex.  Be careful of Storey Bridge noise. Great views.  Great pool.

Soleil has only just opened.  It is currently the tallest building in Brisbane.  A large building with over 400 apartments, but a large nunber have not been sold.  It has short term rentals.  This link lists Soleil apartments for rent.

On Alice Street in the city, if you can get an apartment in Quay West, that is fantastic, as it has park and river views.  About half the apartments in this building are hotel managed, so it is easy to get short term accommodation in Quay West, but difficult to find an apartment for a long term lease.  All apartments are privately owned.  Try to rent above level 7 for the better views.

For an inner city downtown building, Metro 21 is one of the better quality buildings. It has only 4 apartments per floor -- and tries to be more upmarket so is better than most downtown buildings that aim at students -- it seems to have better availability, and some of the two bedroom apartments have three bathrooms. The baloneys are large:
http://www.realestate.com.au/realestate/agent/metro+21+brisbane/mlibri
and http://www.metro21apartments.com.au/

M on Mary has recently been taken over by new management, so it will be interesting to see what happens in this building.  It was not high on my list previously, but that may change with the new management.

Parklands at Roma Street also has some good apartments.

SouthBank

I recommend Arbour on Grey at SouthBank: http://arbour.com.au/cms/welcome.html

Also, Saville (Mantra) at SouthBank is one of the nicest buildings if you get a river facing apartment.  The apartments are level 8 and above.  Below level 8 is a hotel.  The best thing to do here is call to find out availability.  Telephone 07 3305 2559

West End
There is likely to be some availability in some of the riverside West End apartments.  These include Waters Edge, Flow, Koko and Left Bank.

Some of the better apartments not on the river road include SL8 and Tempo.

In my view, all of the above West End apartments are too isolated.

Apartments in Suburbs

The suburbs that I recommend, due to location, transport and large number of better quality apartments, are Toowong, St Lucia, Taringa, Indooroopilly and possibly Milton and Hamilton.  I don't recommend Chermside.

In Indooroopilly, there has been very little recent construction.  Two of the newer, quality buildings Riva and Ciana.

Riva has apartments with great river views. It is a quiet building, with a pool, and is close to the train station and Indooroopilly Shopping Centre.  It has good onsite managers, but apartments rarely become available here.

Ciana is a larger new complex, in a central location, with many large apartments. There is a pool and gym, plus a bowls club and restaurant! 

One of the newest complex in the Toowong / Taringa area is Fresh.  This complex has two pools, a gym and great gardens, and a large number of apartments are owned by super funds and thus are rentals.  Try here.

Next door to Fresh is Encore, which is a relatively nice complex, with good pricing (but not as nice as Fresh, and some of the apartments are small).  This complex flooded in January 2010.  

St Lucia is harder to find quality -- there are few buildings with onsite managers. So you have to try local real estate agents.  The best buildings are riverfront, and are expensive.

If you want an apartment complex that feels more suburban, then Parklands at Sherwood is a great choice. Many apartments have park/rural views, and there is a great pool and bbq area.

Nearby is Tennyson Reach, where you can get a large new apartment on the river. This is a new complex, but (apart from river views) not a great location.  It was badly flooded.  You can rent a high quality apartment at a reasonable price here, if you don't mind the location.

Median Price Reports Not Always What They Seem

Often, newspapers report on the growth or decline in property values, or identify certain areas as hotspots, or have articles such as "What is your home worth?"  This articles are often based on changes in median price over a period of time.  However, care must be taken when looking a median price reports.  First, the data set may be small.  For example, it is not uncommon for the median price for a suburb to be calculated on less than 20 sales.  Second, there may be a change in the mix of what is sold.   For example, if in one year, many 1 bedroom apartments are sold, and in the next year, many 2 bedroom apartments are sold, then the median price will show growth, when in fact, the values of 2 bedroom apartments may have declined.  Another example is if a large new apartment building completes.  This happened a few years ago in West End -- the newspapers reported dramatic price growth in West End; the change in median price was in fact due to the completion of more than 150 apartments in 2 developments, not due to property values increasing.

It is easy to identify "hotspots" on this basis -- just look to where a number of new apartments buildings or subdivisions are nearing completion.  But this is really misleading.  

The Courier Mail, that often publishes such reports, identifies the risk of looking a median prices:

"A change in median price, more often than not, reflects what has been sold during the two time periods rather than actual price growth.  The only real way to test price growth is to look at resales - the same dwelling resold over time."  Courier Mail Real Estate Section, page 2, 5 January 2013, by Matusik.

Realty Times makes the same point in this article.

As Matusik states "You can't always believe what you read."  [I guess he is referring to the Courier Mail here?]

Living In Strata

Living In Strata is said to be a resource for people living in strata titled buildings.
See www.livinginstrata.com.au

New Edition of Kindle Book

A new edition of the popular Kindle Book Investing in Brisbane Apartments - A Guide for Successful Investing (2nd Edition) has just been published.  This second edition has been updated and revised.  This book is helpful if you are considering buying an apartment in Brisbane as an investment or to live in.  If you don't have a Kindle, then get a free Kindle App or buy a Kindle: Kindle, 6" E Ink Display, Wi-Fi - for international shipment.  Also available in iTune store.

Charlotte Towers Sales

Let’s have a look at the four most recent sales in Charlotte Towers (as set out in government records) located at 128 Charlotte Street in Brisbane:

• Apt 4403 - a very good two bedroom apartment, purchased August 2005 from the developer for $585,000, resold October 2012 for $560,000
• Apt 3010 - purchased October 2004 from the developer for $380,000, resold October 2012 for $365,000 to well known Brisbane property investor Sarina Russo
• Apt 3705 - purchased September 2004 from the developer for $374,000, resold October 2012 for $350,000
• Apt 3007 - purchased from the developer in May 2006 for $533,000, resold February 2009 for $485,000, resold again in September 2012 for $497,000

As can be seen from the above, every purchaser from Devine who purchased off the plan has lost money.  The losses are greater than those shown above once stamp duty and agent's selling fees are taken into account.

Charlotte Towers was developed by Devine, at that time run by David Devine and Ken Woodley, who now run the Metro Property Group.

RP Data-Rismark December Hedonic Daily Home Value Index Results

Capital city home values fall over consecutive years, down -3.8% in 2011 and -0.4% in 2012.  With capital city dwelling values falling by -0.3% over the month of December, home values recorded an aggregate decline of -0.4% over the 2012 calendar year.
Highlights over the quarter:

• Best performing capital city: Darwin +2.5 per cent
• Weakest performing capital city: Hobart, -3.7 per cent
• Highest rental yields: Darwin houses with gross rental yield of 6.1 per cent and Darwin Units at 5.9 per cent
• Lowest rental yields: Melbourne houses with gross rental yields of 3.6 per cent and Melbourne units at 4.4 per cent
• Most expensive city: Sydney with a median dwelling price of $580,246
• Most affordable city: Hobart with a median dwelling price of $317,500

According to RP Data Senior Research Analyst, Cameron Kusher, we have now seen two successive years of annual value declines, however the annual rate of declines has improved substantially compared to last year.

“Home values in Brisbane, Perth and Hobart remain below where they were five years ago, whereas the other mainland cities have all recorded significantly lower rates of growth in home values over the past five years than they did over the preceding five year period."

Brisbane apartment prices (to 31 December 2012):
December 2012 - down 2.8%
Quarter - down 0.9%
Year to Date - down 3.5%
Year on Year - down 3.5%
Median price based on settled sales of Brisbane apartments over the quarter - $363,000.

Arena South Brisbane

A new development is being proposed for Edmondstone Street in South Brisbane, called Arena.  It has a mix of 1, 2 and 3 bedroom apartments, and seems to be more up-market than a number of the other apartment complexes planned for South Brisbane.  The development appears to consist of 2 towers, each 12 floors high.