36 posts tagged “off-the-plan”
The rumor around town is that the Mill at Albion development, by FKP, has been shelved and will not go ahead.
Tennyson Reach Lawsuit Judgment
As previously noted, Mirvac is suing a number of its off-the-plan customers for failure to settle at the over-priced Tennyson Reach development. Mirvac was recently successful in court on one issue. A purchaser claimed that the lot size of the apartment was 1sqm less than shown on the plan. This is what the court said on this issue:
"The contract provided that the seller could make changes to the size of a lot of up to five per cent (more or less) than that shown in the Disclosure Statement. Accordingly, the description of the floor area on the plan insofar as it operated to clearly identify the lot should be taken to be up to five per cent different (more or less) from 177 m2, namely that it would have an area of between 168.15 m2 and 185.85 m2. On this basis the reduction in the size of the balcony by 1 m2 as depicted on later plans including plans that became part of the second further statement did not mean that the Disclosure Statement contained information concerning the floor area of the proposed lot that became inaccurate.
In short, insofar as the description of the floor area served to clearly identify the lot, the floor area was to be between 168.15 m2 and 185.85 m2 and this information did not become inaccurate after the Disclosure Statement was given. On this basis, the reduction in the size of the balcony by 1 m2 did not give rise to an inaccuracy that the plaintiff was required to address in a rectification statement under s 22."
The leason to learn here is that most off-the-plan contracts have a clause that says that apartment sizes can vary. In this case, the purchaser could have ended up with 10sqm less than what they believed they were getting, and would still be required to settle.
See http://archive.sclqld.org.au/qjudgment/2009/QSC09-269.pdf
Mosaic The Valley is now being sold off-the-plan, with a large advertising campaign. It is located on Ann Street (the major road from the airport to the city), at Church Street. If there are enough off-the-plan sales, so that construction can start, the developer hopes to complete in mid-2012.
There are 16 apartments per floor, mostly small 1 bed apartments. The building is about 15 stories high. There are over 240 apartments. The building does not have a pool. Most apartments do not have a balcony.
The apartments are small. For example, there is a studio apartment which is 50sqm. The bedroom is located internally, with sliding doors that can open. A similar sign is 54sqm. The 54sqm studio apartment, with a car park, on a mid-level is about $500,000 (or $435,000 without a car).
The largest style apartment is a 2 bed, 2 bath, for example, 79sqm, plus a 7 sqm balcony. The two bedroom apartments are located at each of the four corners of the floorplate -- so two are on Ann Street, and the other two face West. Not ideal in either case.
The two bedroom apartments range from $505,000 to $700,000.
The developer is Leighton Properties.
Recently, a number of purchasers of real estate in an off-the-plan strata title office development in Brisbane, the Matisse Tower, got out of their contracts.
See
APM Property 3 Pty Ltd v Blondeau & Ors [2009] QSC 326 (8 October 2009)
It has been reported that Alec Spencer, who is or was associated with Matisse Tower, is in financial trouble.
He is quoted in The Australian as being a director of the developer of Matisse
Brisbane's Matisse Tower office sales at $40m | The Australian
His consultancy company has also been mentioned in NSW Parliament.
As previously reported on this blog, a number of off-the-plan purchasers at Mirvac's Tennyson Reach failed to settle, and are being sued by Mirvac. Mirvac is now selling these apartments by auction.
"A
very frenetic listing week has culminated with the official listing of
nine riverfront apartments (under instructions from Mirvac Queensland
where the buyers have not settled). These apartments are to be auctioned in a line on Saturday the 14th November at 12 noon. Our clear instructions are that these quality riverfront apartments WILL BE SOLD.
Elsewhere, buyer activity in the middle and upper ends of the market continues to increase as we move into one of the busiest sales times of the year.
Warm Regards,Dianne Bauer
Associate
JOHNSTON DIXON
There are very few new apartment developments in inner city Brisbane under construction and nearing completion. This is good news for owners of existing apartments, as the number of apartments available for sale will not increase dramatically in the next few years. This is my list:
- Evolution - completed last year, overpriced, developer trying to sell remaining apartments
- Vision - developer in bankruptcy situation - unclear if this will proceed, and if so, in what form
- Trilogy - on hold
- Meriton's Soliel - under construction
- Meriton's Herschel Street highrise - advertised by Meriton as coming soon
- Devine's Hamilton Harbour - not in inner city - construction to commence January 2010, maybe Devine's last apartment project in Brisbane
- Rive at Breakfast Creek - construction commencing
- Waters Edge at West End - first stage landworks commencing
- Riverpoint at West End - first stage under construction
- Code at Bowen Hills
- Multiplex's Promenade at the Hamilton shipping terminal
- Mirvac's Waterfront at Newstead
- Macrossan Towers, under construction, one apartment per floor
- Yungaba at Kangaroo Point, about to start pre-sales in the next month
- Mosaic, in the Valley, in presales
Prices on the Gold Coast for apartments are going backwards. Some examples:
- Apart 1202, 12th floor, 2 bedrooms, sold off the plan for $445,000 listed at $580,000, sold in June 2009 for $300,000.
- Apt 607, 1 bed plus study, sold off the plan for $425,000, listed at $550,000 but sold in 2009 for $295,000.
- Eight 2 bedroom apartments were sold in one line (403, 404, 504, 1004, 1104, 1203, 1205, 1304), for an average price of less than $400,000 each, this time last year.
- Apt 2604, large two bedroom with ocean views, sold off the plan for $900,000, recently listed at $1M, then $795,000 but sold for $695,000 in September 2009 at a loss of more than $225,000.
- A two bedroom on level 3 is currently listed for resale at a price less than the buyer's purchase price.
Here is a great advertisement from Ray White, bragging about a sale well below listing price.
Another Property SOLD by the Ray White Surfers Paradise Group!
SURFERS PARADISEFeatures: Balcony
HEAVILY REDUCED $550,000 Now just $419,000
This property was sold for $380,000 at the end of September. (An apartment in Chevron Towers.)
It is interesting to review the information Devine has published regarding its French Quarter development, that it is in the process of selling. It gives a good idea as to developer profit margins and costs of new apartment developments, such as French Quarter. (The information was not password protected at first, now it is, so you will have to trust me on this.)
For the "Carrington" Building (268 apartments, with 302 car parks).
Revenue for residential apartments - $11,400 per sqm, totalling $411M
Revenue from selling management rights - $2.45M
Total Development costs, including land value at $49M and construction costs at $177M = $310M
Profit - $85M
Interestingly, marketing & commission costs are $22M.
("Marketing
Costs allowance 2.0% of Gross Sales Revenue. Commissions of 3.0% of
Gross Sales Revenue with 50% paid on unconditional contracts & 10%
deposit held.")
So, for a 2 bed, 2 bath apartment (110sqm in size), the average price would have been $1.2M. Of this, about $350,000 is profit, and $60,000 approx is marketing costs and commission for the sales agent.
El Dorado Indooroopilly redevelopment, which is running a year behind schedule. Prices have risen dramatically! It seems that about nine contracts have crashed since this time last year, as in Sept 2008, the price list showed that there were 25 or 28 apartments remaining for sale. Now:
"Apartments are now
selling off the plan with the development due to start
in 2010 and the expected completion date is early
2013.
More information along with floor plans is now available on the websites below.
Three bedroom apartments, were $805,000, now listed for $925,000Large two bedroom apartment, was $595,000, now listed at $780,000
Small two bedroom apartment, was $585,000, now listed at $705,000
One bedroom apartment, was $420,000, now $475,000
"There is also a stash of inventory hovering on the sidelines: new apartments that have not been offered for sale because developers — who put units on the market in phases — fear they will push prices down further.
Mr. Miller estimates that there are 7,000 of these “shadow” units in Manhattan alone and more than 20,000 citywide."
Source: NYTimes
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