There are a number of factors over the next few years that will put pressure on both the future launches of new apartment projects, as well as the settlement of apartments under construction.
Recent lending changes by a number of Australian Banks will make it more difficult for foreign purchasers to secure finance – impacting the settlement of some developments more than others.
When tightening buyer and development financing is coupled with rising construction costs – the feasibility of new projects is placed under increased strain.
The figures should be considered in context. The first quarter is typically a slower period with regards to sales activity, and we generally expect sales rates and prices to stabilise throughout the next two quarters.
However we would expect the next quarter to be the fork in the road signalling which way the market will go. The situation will be carefully monitored.
Urbis Brisbane Apartment Essentials report Q1 2016 snapshot:
- There were a total of 1,032 sales between January and March, compared to 1,417 sales in the last quarter of 2015 and 1,221 sales this time last year.
- Urbis monitored 24 new projects across Inner Brisbane, bringing 2,463 apartments to the Brisbane market while 2,769 apartments remain available for sale.
- Urbis estimates around 2,900 apartments will launch during the next quarter, bringing the total number of available apartments to close to 5,700
- Brisbane CBD* bucked the trend and was the only precinct to record a sales increase, with a 64 percent increase compared with the December 2015 quarter.
- The Inner South* recorded nine new project launches, bringing some 830 apartments to the area which continues to see the highest level of sales activity.
- The two-bedroom two-bathroom apartment continues to be the most popular product with 581 sales accounting for 56 percent of total sales activity. All other core product types including one and three bedroom apartments recorded a decrease in sales.
- There was strong occupancy in new apartments with a vacancy rate of just 1.6 percent in the inner city (Urbis Inner Brisbane Apartment Rental Review), versus 3.8 percent in the total (new and established) market (Real Estate Institute of Queensland).
*Inner South suburbs include South Brisbane, West End, Highgate Hill, Dutton Park, Woolloongabba, Greenslopes, Annerley, Fairfield and Yeronga.
*Inner West suburbs include Newmarket, Kelvin Grove, Red Hill, Ashgrove, Bardon, Paddington, Milton, Auchenflower, Toowong, Taringa, St Lucia.
*Brisbane CBD suburbs include the central business district and Petrie Terrace.
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