The apartment is designed to entertain with a nightclub, a commercial kitchen for caterers, its own cinema and 23 parking spaces reserved for its guests.
A plush Queensland party penthouse is so unique that its selling agents have no idea how much money it will go for.
The apartment, which spans the highest two floors of a one-year-old apartment block in the Brisbane suburb of Cleveland, has 23 garage spaces all to itself and its very own nightclub.
This 1250 square metre property — a size which is “crazy” for an apartment — is designed to entertain, with its entire second floor devoted to hosting guests.
As well as a private nightclub replete with its own dance floor and disco lighting, the prestige property has four living rooms, a cinema, six bedrooms all with their own ensuite bathrooms and a spa that can fit six people at once.
The place also has two kitchens, one of which is suitable for a professional chef to cater to events.
It went up for sale five days ago and the realtors have refused to give any indication of price.
“There’s nothing like it in the country, it’s just insane to be honest,” selling agent Emil Juresic from NGU Real Estate told news.com.au.
“It’s very hard for us to come up with the number because there’s nothing like it (but) it’s going to break some major records.”
Some offers have already exceeded $15 million, according to inside sources.
Although the two-storey top floor apartment was only listed for sale five days ago, interest has already “exploded”.
Selling agents made a viral Facebook post and the website listing has been viewed nearly 10,000 times since it went live.
How many of them will be able to pay for the luxury apartment is entirely another question, according to Mr Juresic.
“We don’t need 1,600 buyers, we just need one right buyer,” he said.
He’s already arranging virtual inspections for Melbourne and Sydney people interested, as well as some international interest from China. A few local buyers have also shown interest.
Potential buyers have already offered around $15 million for the property, 9News reported.
Despite its party vibe, the apartment is apparently owned by a large family.
As well as water views, it also has an open wood fire in the bar area, six gas fireplaces in total and four of its six bathrooms come with stone baths
For an idea of its opulence, Mr Juresic said the family spent $180,000 just on installing bathroom taps.
“There is no penthouse like this in Queensland, the state hasn’t seen anything like this ever,” he added.
Although the owners are willing to wait for the right price, he doesn’t think the wait will be long as the property market is scorching hot.
NGU Real Estate sold $103 million worth of real estate last month, with the average property staying on the market for less than a week.
Many of those are being bought sight unseen, Mr Juresic also noted.
It’s part of a growing trend spurred by the Covid-19 pandemic which has seen the appetite for super-prime apartments grow eight fold.
A report released last week by property consultancy firm Knight Frank found that apartments selling for more than $10 million in Sydney and Melbourne or $7 million plus across Brisbane, Perth and the Gold Coast are on the rise.
Purchases of plush apartments have been turbocharged by the pandemic, especially in the past six months.
There was only an average of 8.7 prestige apartment sales transactions per year from 2011 to 2020, compared to 67 purchases so far in this year alone.
The report’s authors have attributed the booming prestige apartment industry to three main reasons.
Firstly, Australians want low-maintenance homes but still with a lot of space, described as “house-like proportions for entertaining”. A penthouse, or at least a very large and luxurious apartment, meets this criteria.
On top of that, those seeking a luxury residence want one that can be easily locked-up and cared for when they jet off for long periods of international travel again next year.
The final reason for the sudden boom was holidays. Australians are increasingly buying a “co-primary home”, where the second (holiday) home is almost equal in every way to their main residence, especially in terms of comfort.
As demand has increased, so have prices. Luxury apartment prices in high-rise projects have risen more than 30 per cent across the major cities since June 2015, the Knight Frank research found.
Article Source: www.news.com.au
APRA rules to target higher risk loans
Banks will be required to set aside more capital for higher risk interest-only and investor mortgages, under long-planned changes to regulation that are aimed at making the sector more resilient to future shocks.
The Australian Prudential Regulation Authority (APRA) on Monday finalised its new framework for bank capital, which acts as a critical buffer to protect the financial system in economic crises.
The new regime, which APRA has been consulting on for four years, will start in 2023, and it will cement reforms that originated in the 2014 financial system inquiry led by former Commonwealth Bank chief David Murray.
APRA said its new framework would not force banks to raise more capital, but confirmed that it would impose higher capital requirements on mortgage lending deemed to be higher risk.
The changes are unlikely to come as a shock to banks, as they had been repeatedly flagged to the market. In response, banks have in recent years charged higher interest rates to property investors, interest-only borrowers and customers with smaller deposits. At the same time, banks are offering the lowest rates to owner-occupiers with larger deposits who are paying principal and interest.
Bank capital refers to funds held by the bank that can act as a shock absorber against risks, such as borrowers defaulting.
APRA said Australian banks’ top-tier capital had roughly doubled since the global financial crisis to more than $260 billion, and its new framework was aimed at reinforcing this strength.
In mortgages, the largest asset class for Australian banks, the regulator said its new framework would aim to better distinguish between higher and lower-risk lending.
To do this, it is changing the banks’ “risk weights” – financial models used to determine the riskiness of a loan, which influences how much capital is set against different types of lending.
Under the changes, loans to owner-occupiers who are repaying both interest and principal will attract lower risk weights, while loans to investors and interest-only borrowers will attract higher risk weights.
Banks have already incorporated these changes into their pricing in recent years, but APRA’s new framework is likely to embed these practices permanently.
APRA chairman Wayne Byres said the changes were aimed at ensuring the nation’s banking system remained strong compared with banks overseas. “Capital is the cornerstone of the banking system’s safety and stability. It protects depositors during periods of stress, ensures banks can access funding, facilitates payments and helps banks to keep lending to their customers during good times and bad,” Mr Byres said.
“Although Australia’s banking sector is already strongly capitalised by international standards, the new capital framework will help ensure it stays that way,” he said.
Smaller banks have long complained that Australia’s capital framework gives the big four banks and Macquarie Group an unfair advantage in the home loan market. This is because “advanced” banks with more sophisticated risk systems receive more favourable capital treatment.
APRA said its new framework tried to better support competition, but it had not closed the capital gap entirely between the “advanced” banks and others because it supported giving lenders an incentive to invest in advanced modelling.
Article Source: www.brisbanetimes.com.au
CBA Predicts House Prices Will Drop 10pc
Another of banking’s big four has added its voice to the chorus predicting a drop in housing prices is on the horizon.
The Commonwealth Bank of Australia says Australia’s housing prices will drop by 10 per cent as prices start to moderate next year before dropping significantly in 2023.
It is the latest banking institution to join the growing consensus that house prices will correct in 2023: Westpac predicted softer changes in dwelling prices up 8 per cent in 2022 and down 5 per cent in 2023, similar to the ANZ’s assertion of a 6 per cent rise before dropping 4 per cent.
Meanwhile, NAB had witnessed a fall in property sentiment from experts and predicted 4.9 per cent growth next year.
Sydney and Hobart would be the hardest hit capital cities with prices expected to drop 12 per cent in 2023, according to the CBA, however, if the 2022 price increases were included, the impact was less severe.
The prediction for high-density developers was more promising with units to increase by 9 per cent next year before dropping by 7 per cent in 2023, creating a 2 per cent increase overall.
CBA dwelling price forecasts
^Source: CBA, Corelogic
CBA head of Australian economics Gareth Aird said the predictions took into account higher fixed mortgage rates, affordability constraints and natural fatigue after a period of extraordinary price gains.
“Our expectation for the RBA to commence normalising the cash rate in November 2022 means that we expect national dwelling prices to peak in late 2022 around 7 per cent higher than end 2021 levels,” Aird said.
“We expect an orderly correction in home prices of around 10 per cent in 2023 as the RBA takes the cash rate to 1.25 per cent by the third quarter of 2023.”
ANZ senior economist Felicity Emmett unpacked the impact of interest rate decisions and said the Reserve Bank was more concerned about the amount of housing credit in comparison to wage growth, and mortgage serviceability rather than house prices.
However, the increase in dwelling prices was not being passed on to developers, with greenfield sites increasing in price as well as construction costs which went up 7.1 per cent
in the past year.
Article Source: www.theurbandeveloper.com
What Should Every Entrepreneur Know About Caveat Loans?
Who among us hasn’t entertained the idea of running your own business?
Thousands of Australians launched one throughout their middle years. If you wish to join them, though, raising funds might be a roadblock. However, here’s some good news: when you’re in an excellent financial position and have no debt other than your mortgage, you may qualify for a caveat loan.
“Caveat loans are primarily provided to businesses in need of short-term financing, and they are frequently covered by the business’s or shareholders’ personal property,” says Max Funding’s lending specialist Shane Perry.
If you think caveat loans are a viable financing option for your small business, here’s everything you need to know about caveat loans.
How Do Caveat Loans Work?
The first thing to learn about caveat loans is what they are and how it works for entrepreneurs. Caveat loans are short term loans, also known as “bridge loans.” When you take out a caveat loan, you may use any property (commercial, residential, etc.) as collateral and get funds. This kind of financing does not need a lot of paperwork and maybe approved within a day.
Typical Caveat Loan Conditions
Short-term funding is the goal of most caveat loans, which typically have terms of one to twelve months. As a result, small businesses may find themselves in a precarious position despite the decreased interest rates if they fail to pay back their loans on time, placing them in danger of default. In addition, the lender can forfeit the property if the loan is not repaid on time.
Interest Rates On Caveat Loans
If you’re looking for long-term financing, a caveat loan may not be the best option. Private lenders often disclose caveat interest rates on loans on a month-to-month basis. That indicates a monthly interest rate of 0.99 % to 1.5% for many Australian lending institutions.
At first sight, it seems to be an excellent deal — until you factor in the annual rate. Assuming a 12 to 18% yearly interest rate, a borrower would pay least that much every year. By accepting these rates, cash-strapped borrowers risk default and losing the collateral where the lender has placed a caveat.
Second Mortgage, Are They The Same As Caveat Loans?
One of the most common misconceptions regarding caveat loans is that they are seen as a second mortgage—which is wrong. Many people mistakenly believe that a caveat loan is a type of mortgage since the property is being used as collateral; however, this is not the case.
Using the equity in the property as collateral, the lender grants you a loan. However, the lender restricts the property by placing a lien on it. The lender’s caveat prevents you from selling the property. In addition, you can’t obtain additional financing against the same property. Mortgages and caveat loans vary significantly in this respect.
Do Some Australian Business Owners Use Personal Properties As Collateral For Caveat Loans?
Small business owners and sole proprietors often use their personal property as collateral, and lenders are more than willing to accept that. However, if the property is occupied as a residence, the risk is just too high.
It’s usually a good idea to understand caveat loans before applying. Don’t rush into the deal since you won’t secure additional financing for your property. However, it’s good to note that caveat loans allow you to finance 100% of your loan-to-value ratio even if you have a poor credit history. Caveat loans are a great option if you’re looking to grow your business, launch a new venture, or improve your cash flow.
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