A new service has just launched, to allow property owners to sell without an agent. Some real estate agents are so hopeless, and don't return buyers calls, so there is some appeal here if you know what you are doing. See www.noagent.com.au
Saturday, March 12, 2016
Friday, March 11, 2016
Will Brisbane Prices Increase This Year?
CoreLogic recently reported:
"The trend in home value growth is showing signs of increasing in those markets that have previously underperformed. These include Brisbane, Adelaide, Hobart and Canberra. Affordability constraints as apparent in these cities and rental yields been compressed to the same extent as what they have in Melbourne or Sydney. Home values increased in Brisbane by 5.5% over the past year, which is the fastest annual rate of value growth in a year."
The above 5.5% included houses and apartments. Below is the information just for apartments, which is not as good. The question is whether Brisbane will have capital appreciation across the board, or whether it will be limited to certain suburbs, or to houses (not apartments), or to houses and older apartments in better locations. There appears to be great oversupply of new smaller apartments, in locations such as Newstead and South Brisbane, so capital appreciation of this dwelling type seems doubtful.
Year to Date - up 1.5%
Year on Year - up 3%
Median price based on settled sales of Brisbane apartments over the quarter - $391,000 (which is less than reported for the quarter ending May 2015).
"The trend in home value growth is showing signs of increasing in those markets that have previously underperformed. These include Brisbane, Adelaide, Hobart and Canberra. Affordability constraints as apparent in these cities and rental yields been compressed to the same extent as what they have in Melbourne or Sydney. Home values increased in Brisbane by 5.5% over the past year, which is the fastest annual rate of value growth in a year."
The above 5.5% included houses and apartments. Below is the information just for apartments, which is not as good. The question is whether Brisbane will have capital appreciation across the board, or whether it will be limited to certain suburbs, or to houses (not apartments), or to houses and older apartments in better locations. There appears to be great oversupply of new smaller apartments, in locations such as Newstead and South Brisbane, so capital appreciation of this dwelling type seems doubtful.
Brisbane apartment prices (to 29 February 2016):
February 2016 - down 1%
Quarter - up 0.9%Year on Year - up 3%
Median price based on settled sales of Brisbane apartments over the quarter - $391,000 (which is less than reported for the quarter ending May 2015).
Wednesday, March 9, 2016
Property Prices Double Every 10 years?
I have been to seminars by property agents and promotors, where they say that property is a sure investment because property prices double every 7 to 10 years. CoreLogic debunks that "rule".
"Melbourne is the only capital city housing market in which home values have doubled over the past decade. In fact, many cities are a long way from having doubled with values in Brisbane, Adelaide, Perth, Hobart and Canberra having all increased by less than 50% over the past decade."
See CoreLogic Report
"Melbourne is the only capital city housing market in which home values have doubled over the past decade. In fact, many cities are a long way from having doubled with values in Brisbane, Adelaide, Perth, Hobart and Canberra having all increased by less than 50% over the past decade."
See CoreLogic Report
Monday, March 7, 2016
Off the plan risks
Two stories in the AFR today are worth reading, both on page 33.
The first is titled "Industry warns of settlements failure". It has a chart that shows that the average number of completed apartments in Brisbane for the period 2007 to 2014 was less than 2,500 a year. For 2016, it is predicted to be more than 5,000 in the year. For 2017, it is closer to 10,000, or more than 3 times the past average.
"The settlement risk will occur in places where prices are slowing and the market's getting harder."
"Banks are not only cutting back their LVRs, they are also taking a more conservative approach to valuing completed apartments, and in the case of at least one retail bank, this meaning between 15 and 23 per cent below the purchase price."
So if you are buying off the plan, and have paid a 10% deposit, you may need to stump up 40% of the contract price, because the Banks may only lend in effect 50% of the purchase price.
The second article is titled "Lenders nervous about incentives to apartment buyers". It states:
"A recent survey by WBP Property sowed nearly half of the off-the-plan sales in the eight months to last August were in negative equity, which means worth less than the purchase price." And this does not take into account transaction costs, such as stamp duty.
The first is titled "Industry warns of settlements failure". It has a chart that shows that the average number of completed apartments in Brisbane for the period 2007 to 2014 was less than 2,500 a year. For 2016, it is predicted to be more than 5,000 in the year. For 2017, it is closer to 10,000, or more than 3 times the past average.
"The settlement risk will occur in places where prices are slowing and the market's getting harder."
"Banks are not only cutting back their LVRs, they are also taking a more conservative approach to valuing completed apartments, and in the case of at least one retail bank, this meaning between 15 and 23 per cent below the purchase price."
So if you are buying off the plan, and have paid a 10% deposit, you may need to stump up 40% of the contract price, because the Banks may only lend in effect 50% of the purchase price.
The second article is titled "Lenders nervous about incentives to apartment buyers". It states:
"A recent survey by WBP Property sowed nearly half of the off-the-plan sales in the eight months to last August were in negative equity, which means worth less than the purchase price." And this does not take into account transaction costs, such as stamp duty.
Thursday, February 18, 2016
Apartment lawyer in trouble
Well known lawyer, Michael Teys, has been banned by ASIC from being a director. Mr Teys often advises body corporate committees in relation to issues with onsite managers. For example, he advised the committee of Admiralty Towers Two not to accept the assignment of the management rights from bank receivers to a professional manager due to the honesty and business skills of the proposed manager. Very strange. The pot calling the kettle black.
I suspect many committees have been unduly influenced by Mr Teys' almost religious like views of management rights.
Monday, February 8, 2016
Brisbane Vacancy Rate Increases
According to the REIQ, the rental vacancy rate in the inner city of Brisbane is almost double that of the middle ring:
The REIQ Rental Report has revealed a higher vacancy rate in inner Brisbane as the supply of new apartments edges the
0-5km ring into weak territory for the December quarter.
The inner Brisbane vacancy rate reached 3.8%, up
from 3.4% in the September quarter.
In contrast, the more affordable middle ring of
5-20kms tightened as the more affordable dwellings attracted residents, going
from 2.4% to 2.1%.
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