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