Smelling roses after gamble on Hibiscus
AFELLOW who bought a ‘distress’ property at a city council auction last year could soon be sporting a beaming million-dollar smile. Jason Hegarty, a Brisbane valuer, and two partners bought an eighthfloor apartment in oceanfront Main Beach tower Hibiscus.
They paid, in what was an exercise not entirely free of risk, $421,000 for their two-bedroom spot – substantially below ruling rates in the 39-yearold tower.
The apartment below it is the same size and same layout and sold for $620,000 in 2017.
Yes, the Hegarty team appears to have kicked a goal but it could turn into a golden goal.
A developer, in the form of Dean Pask, has made an unsolicited offer of $25m for the whole 11-floor building.
The offer is yet to run its course and might be raised or, quite possibly, heartily topped by other players.
The 18 Hibiscus owners, should the Pask figure be a winner, would receive an average of $1.315m.
Hegarty and his partners probably would do better than that – their eighth-floor apartment is one of the higher ones in the tower.
It’s also fronting the beach – half of the Hibiscus apartments back on to Main Beach Pde and thus are less valuable.
It’s worth pointing out that Hegarty, as with other people who buy residential properties auctioned over unpaid rates, are by no means sure to come up trumps.
Properties are sold in an ‘as is, where is’ condition and a reserve price is set.
The city council doesn’t tell potential buyers whether the property complies with building codes – it’s up to any bidder to conduct searches on such matters.
The real bite is that the council, as it doesn’t have possession of the property being sold, can’t give would-be bidders access to inspect it.
If the property isn’t vacant, it’s the job of the successful bidder to achieve that end.
The auction winner has to settle within seven days, as happened at Hibiscus, and their spending mightn’t end there.
The proceeds of sale might not be sufficient to discharge all liabilities attached to the property, such as body corporate levies and land tax, and the new owner might have to pay up.
Meanwhile, it could be a while before the fate of the Hibiscus will be known.
It appears that since the Pask offer was made, other parties have shown an interest.
That interest has sparked an invitation to agents to submit proposals to market the Hibiscus.
It seems the ‘winner’ was Broadbeach’s Michel Kollosche but there’ll be no marketing until he has the agreement of every owner to ‘test the water’.
The attraction to developers of the Hibiscus, which has a full-size tennis court, is its 1355sqm site and major beach frontage.
More than $20,000 a square metre has been paid for a beachfront site to the south on Main Beach Pde.
The Pask offer represents $18,450 a square metre.