Units sell­ing at 20pc dis­count – so long as you buy in bulk

The Weekend Australian - - THE NATION - TURI CON­DON

Cashed-up in­vestors are eye­ing Bris­bane’s hard-hit apart­ment mar­ket, buy­ing bulk lots of units in new tow­ers and strik­ing dis­counts of 20 per cent or more.

Poker ma­chine mag­nate Len Ainsworth and a for­mer Mac­quarie banker are among those re­ported to have bought job lots as prices fall.

David Beard, founder of Bris­bane agency Prop­erty Di­rect, said he had ne­go­ti­ated on three re­cent deals where buy­ers had looked at pack­ages of be­tween 25 and 100 new in­ner-city units at 20 per cent be­low their ask­ing price.

None of the deals had come to fruition but some of the po­ten­tial buy­ers re­main in­ter­ested, he said.

Among the projects to have seen bulk sales are rich­lis­ter Tim Gurner’s three-tower FV project in Bris­bane’s in­ner-city For­ti­tude Val­ley, Con­sol­i­dated Prop­er­ties’ Spire tower in the CBD and Metro Prop­erty De­vel­op­ment’s La­guna and St Tropez build­ings in near-city New­stead.

De­vel­op­ers had been bruised by a per­fect storm of banks crack­ing down on lend­ing to lo­cal in­vestors and off­shore buy­ers, while gov­ern­ments have raised stamp duty for for­eign buy­ers and val­uers have been “ruth­less” when es­ti­mat­ing the worth of apart­ments ahead of set­tle­ments, Mr Beard said.

Some de­vel­op­ers have been left with units in new projects af­ter mostly Chi­nese buy­ers, who dom­i­nated the sales in a num­ber of tow­ers, failed to set­tle.

De­vel­op­ers keep the 10 per cent de­posit and have been of­fer­ing that or more as they move to clear the over­hang.

BIS Ox­ford Eco­nomics head of res­i­den­tial re­search Angie Zigo­ma­nis said last fi­nan­cial year saw the peak in Bris­bane’s new in­ner-city unit com­ple­tions with 7400 apart­ments fin­ished, but a fur­ther 5500 were due to be com­pleted this fi­nan­cial year.

Syd­ney, where the boom has been more sub­ur­ban than Bris­bane’s in­ner-city surge, saw 26,100 apart­ments built last fi­nan­cial year with 28,250 due to be fin­ished in the year to June.

In Mel­bourne, the sup­ply of new units peaked in the 2017 fi­nan­cial year at 9200, eas­ing to 7800 in 2018 but with still more than 6000 to be fin­ished in the next two fi­nan­cial years.

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