Five year delayed settlements offered at Brisbane's Belise development

The Reed Brisbane development group is giving buyers five years to settle if they buy any of the 20 remaining apartments in the 228-unit Belise project in Brisbane's Bowen Hills.

His deferred settlement marketing campaign was recognition of the difficult financing environment for investors, director Richard Ash said.

Buyers need to pay a deposit – of $60,000 or more – before they can take possession of a unit.

They will also pay monthly lease fees for five years, when the developer would hand over the title.

It will also sell the remaining units at prices ranging from about $400,000 up to $1 million unconditionally for cash at a lower price than those buying on a deferred basis.

Reed has paid back its debts on the project, which completed last year, but has changed its offer.

"The world has changed," he told Fairfax Media.

"There is no doubt the availability of debt for home owner-occupiers and investors has changed.

"Purchasers will find it easier to refinance or get finance in five years' time."

Unit prices were likely to rise during the next five years, Mr Ash said.

"We think there may be some downside left but probably not a lot," he said.

"We're very comfortable that in the next three to five years there is upside in those prices."

The deferred sales weren't a sign of distress on the part of the developer, fellow Reed director Ric Peterson said.

Property Observer wrote in 2014 that with 80% of the apartments sold, Belise would soon see a tower crane on the site.

The $120 million Belise project had completion expectations for March 2016.

In 2016 the remaining in the development had prices start from $477,000. 

They had been advertised as "cash flow positive investments" from "year one". This would be for the after-tax outcome for a one-bedroom plus study with a 90% lend for assumed household income buyer of $80,000 to $180,000, at a $471,000 purchase price.

Breaking this down for a one-bedroom plus study shows that to get a substantial after tax cash flow, you would be renting it out furnished ($15,000 packages are available from the developer) or the positive cash flow is $1.63 per week after tax in year one. Adding the furniture package alters the numbers by slightly increasing the rent and providing more depreciation deductions. Interestingly, repairs and maintenance are kept equal for both equations. They make 5% annual capital growth rate assumptions. Body corporate is expected at $3,650 for year one and property management is estimated at 8% plus GST. A furnished apartment is projected as bringing in an after-tax positive cash flow of $84.20, according to their equations.

It was a slow start for the project, having launched in October 2010, but in November 2013 was seeing traction.

The median unit price in Bowen Hills peaked at $498,000 several years ago, according to RP Data.