Brisbane finding its “new normal”

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We are seeing the market continue to self-regulate, returning to a more sustainable level of activity and giving the market time to absorb the current stock available

Urbis Associate Director Paul Riga said the decline in the total sales was expected but the launch of fewer projects had resulted in a market where supply and demand were still within reach of each other.

“We are seeing the market continue to self-regulate, returning to a more sustainable level of activity and giving the market time to absorb the current stock available,” Mr Riga said.

“Essentially the sales are still there but they are much harder to achieve for developers.”

Mr Riga said the contraction in the market was felt right across the Inner Brisbane precinct He said sales volumes around the 800 mark were likely in the next two to three quarters.

“Many of the monitored projects have moved into the construction phase, winding down the level of sales and marketing,” he said.

“In addition, we now have a savvier, more discerning level of investor operating in the market”.

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We are now moving firmly into the delivery phase of Inner Brisbane’s first major apartment boom, so the focus is increasingly turning towards the rental potential of these apartments

Mr Riga said approximately 25 new projects are expected to launch between July and December 2016, bringing a potential 2,850 new apartments to the market.  

“This is around half the level of supply brought to market at the same time last year,” he said.

The Brisbane Apartment Essentials report also found sales prices had also been steadily decreasing since the end of last year – particularly with two-bedroom product.

“The decline in the median sales price has been largely driven by product availability, with a larger proportion of transactions occurring in more affordable Inner Brisbane precincts,” he said.

Mr Riga said there had been an increase in the proportion of sales in Brisbane’s inner-city for one-bedroom apartments with one-carpark, making up 34 percent of total sales.

However he said the staple configuration remained the two-bedroom, two-bathroom apartment, which represented 50 percent of total sales.

Data from the report showed 162 projects were selling off the plan, with approximately 70 percent of these currently under construction or completed.

“We are now moving firmly into the delivery phase of Inner Brisbane’s first major apartment boom, so the focus is increasingly turning towards the rental potential of these apartments,” Mr Riga said.

“It will be a competitive market and we are progressively going to see a ‘flight to quality’ – with tenants looking for projects that offer value, connectivity, lifestyle amenity and a point of difference.”