2011 - what's in store

7 interest rate increases in little over a year played a large part in ensuring that the local property market softened considerably towards the end of 2010. Add this to the significant downturn in international student demand due to the Australian Government's changes to visas, financial burdens placed upon students, and a strong aussie dollar, and the result is that the prices for apartments have slipped somewhat.

However, we are optimistic that the current malaise could be reversed very quickly. Resources, defence and education are still the 3 big games in town and we have heard that big things will happen in 2011 which will translate into a turnaround in demand for city apartments...

More mixed use buildings

Following on from our earlier features on mixed used buildings, last month saw 2 transactions in other mixed use buildings. We sold a top floor 2 bedroom Mantra apartment for $500,000. This 80 square metre apartment had a wrap around balcony and overlooked Hindmarsh Square with the Adelaide Hills in the background.

We were also instrumental in acquiring a 3 bedroom apartment in the building known as 22 The Square, which is part of the Garden East project sitting between the Rundle Street East Cafe Precinct and Grenfell Street. Our client paid $825,000 for this large apartment with 2 carparks and we facilitated foreign investment approval for the transaction.

We love doing these kind of deals in the city and equally love sitting down with our clients having cappuccinos in the ground floor cafes situated in these buildings while we are doing the deals!

Wakefield Street sales activity

We had a bit of activity in the building with our company selling apartment 31 for $830,000 and apartment 14 transacting for just under the million dollar mark in the past few weeks.

We think apartment 31 is interesting because we have been following it since the beginning of its fitout (see these stories) and it was the first apartment to sell to a buyer who wants to exclusively use the space for business purposes. The marketing company felt that the apartment matched its creative business perfectly by providing the ideal environment for the staff and principals. We were thrilled as we designed the spaces for residential, home office or studio/office uses from the outset and it's great to see when this versatility is recognised in the market place.

We have just listed another 2 apartments in the building both priced in the $800,000's and both offering stunning work/life environments. The volume of space offered by double height floor to ceiling space is something that needs to be experienced to be fully appreciated. Both apartments can be seen privately. Click here for more details.

Changing of the guard

Congratulations to our new Lord Mayor, Stephen Yarwood - a 39 year old town planner and city resident who appreciates that a city like ours needs people ... lots of people .,. living, working and occupying really great spaces in really great buildings.

Counting the dollars

We just settled the $460,000 sale of a 2 bedroom apartment in the South Building of our development at 4-8 Charles Street Adelaide (aka 223 North Terrace). This apartment was originally bought off the plan for $305,000 in October 2006 and we managed the rental since that date for the owner.

As it quite conveniently turned out that it was both bought and sold in the month of October, we thought we would "run the slide rule" over his 4 year investment. The initial rental was $365 per week in the first year and this was periodically increased to $450 per week as at October 2010.

So if we add his gross sale profit of $155,000 and his rental income of $85,900 this totals $240,900, equating to a gross return of some 79% on the initial $305,000 investment.

We encourage all of our readers to buy an apartment in the City of Adelaide ... hopefully from us : )

Free Parking (As long as you don't have a car...)

We noted with interest that research by the City of Sydney Council (as reported in the Australian Financial Review) shows 1 in 3 households across the Sydney local government area do not have cars. This means that planning authorities and developers are now re-thinking how many carparks need to go into new apartment buildings.

In Adelaide the conventional approach to apartment buildings has been to provide 1 carpark for a 2 bedroom apartment and 2 carparks for a 3 bedroom apartment in a building designed to attract owner occupiers (like 223 North Terrace). For buildings designed with the international student market in mind (such as the iPad in Waymouth Street) no on-site carparks are provided, and serviced apartment buildings (for example the Mantra on Hindmarsh Square) have relatively few carparks.

As carparks cost over $50,000 each in a multi-storey apartment building, savings can be made now that the city dwellers are starting to give up their cars. Developers will focus more on spaces in the building for bikes and scooters and possibly for carshare companies. Apartments without car spaces will be more affordable, and more affordable apartments will mean more sales and an increase in the city's population with less traffic congestion!

Wakefield Street attracts the celebrities

This ground breaking development was once home to radio presenter Jodie Blewett, and we were pretty excited a couple of years ago when we leased one of the apartments to 2 of the stars from McLeod's Daughters - Matt Passmore and Luke Jacobz.

Then we sold an apartment in the building to Amber Petty, another radio personality, and we thought that was pretty cool. But when Princess Mary visited Amber and stayed over, there was so much public attention with the national press gathered around the foyer area that we don't think it can ever be topped!

We have just sold one of the top level apartments for well in excess of $800,000, and will have 2 more for sale very soon. Now we just have to figure out how to include "Danish royalty stayed here" into our advertising. Just kidding!