'I suppose I overpaid': West End seller

25 May 2020, 02:05 by Michael Bleby

We speak to the team behind last week's most intriguing property sale.

The property: A three-bedroom, three-bathroom, three-car park penthouse apartment at 1710/45 Duncan Street, West End, Queensland. Sold after auction for $1,620,000.

Who was the agent/agency? Luke O'Kelly, Ray White West End. Vendor (who declined to be identified).

https://static.ffx.io/images/$zoom_0.191%2C$multiply_1.0106%2C$ratio_1.5%2C$width_756%2C$x_0%2C$y_0/t_crop_custom/e_sharpen:25%2Cq_42%2Cf_auto/f6e878589800de32d2ed72d01422f84b317c1b16 — The three-bedroom, three-bathroom, three-car park penthouse apartment at 1710/45 Duncan Street, in Brisbane's West End, sold after auction for $1,620,000.

How long was this on the market? [O'Kelly] Six weeks.

Why did this one sell? [O'Kelly] Because we auctioned it. [Vendor] Good value.

Was it overpriced? [O'Kelly] No. [Vendor] The fact that I was looking for $1.7 million and got $1.62 million – it’s only worth what someone will pay for it. I suppose it was [priced] at the time, at the higher end.

What did you think it would go for? [O'Kelly] $1.7 million. [Vendor] I thought I’d get $1.7 million.

What was surprising about it?

[Vendor] I would have had no problems achieving $1.7 million if I’d put it on the market before Christmas. I read about lots of expats coming back to Australia from abroad because of the virus. I [thought I] could be lucky with getting a good price with so many professionals coming back. It is an ideal apartment to work from home in, in Australia. I do think coronavirus has knocked the gloss off it.

https://static.ffx.io/images/$zoom_0.268%2C$multiply_0.7214%2C$ratio_1.776846%2C$width_1059%2C$x_0%2C$y_97/t_crop_custom/e_sharpen:25%2Cq_42%2Cf_auto/8b0db3822aebf5e73559449966a372372e3898a4 — The vendor paid $1.7 million for the unit in 2014 and had hoped to get his money back, but the proliferation of apartments in West End has lowered the prices of existing stock.

[O'Kelly] We ended up getting a premium price for the property. The market in West End hasn’t changed as a result of COVID-19 – $1.62 million is a great outcome, if we’re talking COVID-19 or not. West End is a market that hasn’t seen capital growth for the past 10 years.

[Vendor] I flew across in 2014, fell in love with it and bought it. When I first saw it, I thought: "This is it. I’ve died and gone to heaven." It stood out to me. Coming from Ireland, everything is more enclosed because of the weather, whereas in Brisbane everything is outdoors. The flow continued out onto the balcony.

I paid $1.7 million. It was expensive, but one of the bonuses of coming from Europe was the currency was stronger. The Aussie dollar was a bit of a bonus for me there.

The dollar is Monopoly money at the moment – the US dollar is so strong. It has literally 20 per cent more buying power than two, three months ago. That all played into [my decision to sell].

[O'Kelly] As a location to live, you can’t beat the lifestyle and the proximity to the city, but as an investment, if you were to put the money anywhere else, arguably his investment of $1.7 million would be worth substantially more.

https://static.ffx.io/images/$zoom_0.191%2C$multiply_1.0106%2C$ratio_1.5%2C$width_756%2C$x_0%2C$y_0/t_crop_custom/e_sharpen:25%2Cq_42%2Cf_auto/65f24ce3940ad9bc502c0891764fb2a4943efdb0 — The flow from inside the apartment to outside attracted the vendor, who bought it in 2014 while living in Ireland.

There is a lot of industrial and commercial space on Montague Road. There are another 2500 apartments that will go up over time. When you have new stock coming onto the market continually, it’s very difficult to get capital growth.

But you said you thought the market was strong enough to pay $1.7 million?

[O'Kelly] I do. I also think that $80k was within the margin of error. When you look at West End more generally, it is rare to find a seller that makes a significant amount of money in apartments. The one-bed [apartment] market is the hardest, where people are losing 10 to 15 per cent of their purchase price in resales. The bigger the apartment, the more they’re holding their value, because there’s fewer of them.

[Vendor] So many apartments have gone up in West End, I suppose I overpaid, but the other penthouse apartment that’s similar to mine hasn’t got an extra bathroom. They paid the same as I did at the time. There’s a few people that have overpaid. It’s one of those things. I’ve made some money from property in the past. You’ve got to take it on the chin.

Was the buyer a returned expat?

[Vendor] No. That whole idea went pear-shaped. It was the opposite. It was a couple who are looking at going overseas for a couple of years. They were looking at selling where they’re living, but keeping a foothold in the West End. On all fronts I was completely wrong!

Do you reckon we’ll see another result like this: a) next week b) next year c) next cycle d) never?

[O'Kelly] c) Next cycle. This first half year is the opportunity – it has been the time to sell. The second half of 2020 is going to be a lot tougher market. It is going to be a while before we see sales results of this calibre.

[Vendor] On my bloody luck it’ll be an expat coming next week with lots of Aussie dollars and he’ll pay a premium!