Welcome Guest [Log In] [Register]


Reply
  • Pages:
  • 1
Michael Matusik calls oversupply in Brisbane one bed market
Topic Started: 27 Aug 2014, 09:27 AM (1,635 Views)
peter fraser
Member Avatar


INNER BRISBANE APARTMENTS
LINK

From the article.
Quote:
 
MM: Sure, but I cannot name names, so to speak, as certain developers are very sensitive about this topic & often legal threats are made if anyone, regardless of the overwhelming evidence, makes some frank & honest observations. So I will keep my answer here general in nature.

The key point here is that a lot of the new apartment sales being made across inner Brisbane are to overseas buyers or local Asian residents, who are buying on behalf of those living overseas. The settlement records clearly show this trend. I am not xenophobic, but selling this way has potential risks.

Overseas investors, especially the Chinese, have blinkers on – they aren’t interested in buying anything other than inner city apartments, despite better – in my opinion – passive investment opportunities elsewhere. So the current surge in buying interest feeds on itself, with faster reported ‘sales’, which further excites buyers, especially those some distance from the market…..and the surge escalates.

AL: So, are you talking about a bubble?

MM: Yes, it is starting to feel very unsustainable, particularly when you have overseas developers paying very high prices – frankly, overpaying – for development sites, many now without a DA. The only way forward in many cases is to escalate the price of apartments and/or reduce their size. Both trends have, again for mine, already reached a tipping point, which is based around rental returns.

AL: And resale results?

MM: Thanks for reminding me. The official government records show that two out of three resales in recently completed inner Brisbane apartment projects have resold for a loss. The losses – in gross terms – have been minor, averaging 5%, but still they are losses. This reflects the rental market, with rents often dropping after the first tenancy period.

Again for mine, the rents being advised for new apartment projects across inner Brisbane are too high. Investors need to really question the depth of the rental market before buying.






Note for John Frum - note the bubble call by Matusik on small apartments in Brisbane.

Read the full report here - LINK
Any expressed market opinion is my own and is not to be taken as financial advice
Profile "REPLY WITH QUOTE" Go to top
 
Dr Watson
Member Avatar


I've no idea about the Brisbane market, Peter, but more Matusik please. He's a healthy dose of common sense.
The trouble with the world is that the stupid are cocksure and the intelligent are full of doubt — Bertrand Russell
Profile "REPLY WITH QUOTE" Go to top
 
peter fraser
Member Avatar


Dr Watson
27 Aug 2014, 09:44 AM
I've no idea about the Brisbane market, Peter, but more Matusik please. He's a healthy dose of common sense.
I would be very surprised if the same conditions are not occurring in Sydney and Melbourne. If so we should see a two speed market in 2 or 3 years as we over supply one and two bed apartments and undersupply detached houses in well located areas.

The oversupply in apartments does offer an alternative for many people so it should slow price growth in the future.
Any expressed market opinion is my own and is not to be taken as financial advice
Profile "REPLY WITH QUOTE" Go to top
 
zaph
Default APF Avatar


Quote:
 
Firstly, there is a risk that the overseas buyers might not settle, especially if there is a change in their financial circumstances or investment performance – perceived or otherwise, here. This would be very problematic. It might be a small risk, but it is there.


If the price has dropped more than the deposit try suing an overseas buyer for the difference if they refuse to settle. It would be slow at first, but it could easily snow ball. Those developers who had 100% OTP may discover they now don't and can't sell for what they were expecting.
Profile "REPLY WITH QUOTE" Go to top
 
Foxy
Member Avatar
Zero is coming...

Honestly who in there right mind would buy a 1 bedroom unit.
Peter
http://www.afr.com/content/dam/images/g/n/2/1/u/8/image.imgtype.afrArticleInline.620x0.png/1456285515560.png
Profile "REPLY WITH QUOTE" Go to top
 
miw
Member Avatar


Mustapha Mond
27 Aug 2014, 10:10 AM
Honestly who in there right mind would buy a 1 bedroom unit.
Peter
I have some 1-bedroom units, admittedly bought over a decade ago when 1-bedders were relatively rare in Brisbane and household size was dropping quite fast. They have at least tracked and sometimes outperformed the 2-bedders in terms of capital growth to now, and have yielded better on the rent front.

Now that they are not rare, I would probably not be buying in that market.
The truth will set you free. But first, it will piss you off.
--Gloria Steinem
AREPS™
Profile "REPLY WITH QUOTE" Go to top
 
zaph
Default APF Avatar


miw
27 Aug 2014, 04:34 PM
I have some 1-bedroom units, admittedly bought over a decade ago when 1-bedders were relatively rare in Brisbane and household size was dropping quite fast. They have at least tracked and sometimes outperformed the 2-bedders in terms of capital growth to now, and have yielded better on the rent front.

Now that they are not rare, I would probably not be buying in that market.
I'd buy a one bed unit if it suited my needs.
Profile "REPLY WITH QUOTE" Go to top
 
jesusjones
Default APF Avatar


zaph
27 Aug 2014, 10:10 AM


If the price has dropped more than the deposit try suing an overseas buyer for the difference if they refuse to settle. It would be slow at first, but it could easily snow ball. Those developers who had 100% OTP may discover they now don't and can't sell for what they were expecting.
My wife!!

She's been on about buying a one bedroom investment
Property in Brisbane CBD, I have been
Holding off and want to keep the $$ in he bank,think I need to have a chat over dinner
Tonight.
Profile "REPLY WITH QUOTE" Go to top
 
miw
Member Avatar


jesusjones
27 Aug 2014, 06:49 PM
My wife!!

She's been on about buying a one bedroom investment
Property in Brisbane CBD, I have been
Holding off and want to keep the $$ in he bank,think I need to have a chat over dinner
Tonight.
Yeah. It's not what I would be looking at right now. That bird has flown. CBD and near-CBD 1-bedders were all the rage 15 years ago and people did pretty well. I wish I had listened to my GF and bought into Newfarm in the early-mid 1990s. Steer her to suburbs like Corinda.
The truth will set you free. But first, it will piss you off.
--Gloria Steinem
AREPS™
Profile "REPLY WITH QUOTE" Go to top
 
Blondie girl
Member Avatar


It's a serious issue to consider, I've never ever liked apartments stuff.

It's about leveraging the equity to buy the next.

Apartment glut is a put off & can stuff things up , someone else was mentioning the risk of this in Brissie a few weeks ago, it may be a valid concern.
Newjerk? can you try harder than dig up another person's blog. My first promo was with Billabong and my name in English is modified with a T, am Perth born but also lived in Sydney to make my $$
It's Absolutely Fabulous if it includes brilliant locations, & high calibre tenants..what more does one want? Understand the power of the two "P"" or be financially challenged
Even better when there is family who are property mad and one is born in some entitlements.....Understand that beautiful women are the exhibitionists we crave attention, whilst hot blooded men are the voyeurs ... A stunning woman can command and takes pleasure in being noticed. Seems not too many understand what it means to hold and own props and get threatened by those who do.
Banks are considered to be law abiding and & rather boring places yeah not true . A bank balance sheet will show capital is dwarfed by their liabilities this means when a portions of loans is falling its problems for the bank.
Profile "REPLY WITH QUOTE" Go to top
 
1 user reading this topic (1 Guest and 0 Anonymous)
ZetaBoards - Free Forum Hosting
Create your own social network with a free forum.
Learn More · Register Now
Go to Next Page
« Previous Topic · Australian Property Forum · Next Topic »
Reply
  • Pages:
  • 1



Australian Property Forum is an economics and finance forum dedicated to discussion of Australian and global real estate markets and macroeconomics, including house prices, housing affordability, and the likelihood of a property crash. Is there an Australian housing bubble? Will house prices crash, boom or stagnate? Is the Australian property market a pyramid scheme or Ponzi scheme? Can house prices really rise forever? These are the questions we address on Australian Property Forum, the premier real estate site for property bears, bulls, investors, and speculators. Members may also discuss matters related to finance, modern monetary theory (MMT), debt deflation, cryptocurrencies like Bitcoin Ethereum and Ripple, property investing, landlords, tenants, debt consolidation, reverse home equity loans, the housing shortage, negative gearing, capital gains tax, land tax and macro prudential regulation.

Forum Rules: The main forum may be used to discuss property, politics, economics and finance, precious metals, crypto currency, debt management, generational divides, climate change, sustainability, alternative energy, environmental topics, human rights or social justice issues, and other topics on a case by case basis. Topics unsuitable for the main forum may be discussed in the lounge. You agree you won't use this forum to post material that is illegal, private, defamatory, pornographic, excessively abusive or profane, threatening, or invasive of another forum member's privacy. Don't post NSFW content. Racist or ethnic slurs and homophobic comments aren't tolerated. Accusing forum members of serious crimes is not permitted. Accusations, attacks, abuse or threats, litigious or otherwise, directed against the forum or forum administrators aren't tolerated and will result in immediate suspension of your account for a number of days depending on the severity of the attack. No spamming or advertising in the main forum. Spamming includes repeating the same message over and over again within a short period of time. Don't post ALL CAPS thread titles. The Advertising and Promotion Subforum may be used to promote your Australian property related business or service. Active members of the forum who contribute regularly to main forum discussions may also include a link to their product or service in their signature block. Members are limited to one actively posting account each. A secondary account may be used solely for the purpose of maintaining a blog as long as that account no longer posts in threads. Any member who believes another member has violated these rules may report the offending post using the report button.

Australian Property Forum complies with ASIC Regulatory Guide 162 regarding Internet Discussion Sites. Australian Property Forum is not a provider of financial advice. Australian Property Forum does not in any way endorse the views and opinions of its members, nor does it vouch for for the accuracy or authenticity of their posts. It is not permitted for any Australian Property Forum member to post in the role of a licensed financial advisor or to post as the representative of a financial advisor. It is not permitted for Australian Property Forum members to ask for or offer specific buy, sell or hold recommendations on particular stocks, as a response to a request of this nature may be considered the provision of financial advice.

Views expressed on this forum are not representative of the forum owners. The forum owners are not liable or responsible for comments posted. Information posted does not constitute financial or legal advice. The forum owners accept no liability for information posted, nor for consequences of actions taken on the basis of that information. By visiting or using this forum, members and guests agree to be bound by the Zetaboards Terms of Use.

This site may contain copyright material (i.e. attributed snippets from online news reports), the use of which has not always been specifically authorized by the copyright owner. Such content is posted to advance understanding of environmental, political, human rights, economic, democratic, scientific, and social justice issues. This constitutes 'fair use' of such copyright material as provided for in section 107 of US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed for research and educational purposes only. If you wish to use this material for purposes that go beyond 'fair use', you must obtain permission from the copyright owner. Such material is credited to the true owner or licensee. We will remove from the forum any such material upon the request of the owners of the copyright of said material, as we claim no credit for such material.

For more information go to Limitations on Exclusive Rights: Fair Use

Privacy Policy: Australian Property Forum uses third party advertising companies to serve ads when you visit our site. These third party advertising companies may collect and use information about your visits to Australian Property Forum as well as other web sites in order to provide advertisements about goods and services of interest to you. If you would like more information about this practice and to know your choices about not having this information used by these companies, click here: Google Advertising Privacy FAQ

Australian Property Forum is hosted by Zetaboards. Please refer also to the Zetaboards Privacy Policy