Urbis’ latest Apartment Essentials report, Australia’s most comprehensive new apartment survey, explains.
The Inner Brisbane region recorded 138 sales in the fourth quarter 2018, dropping back down after a stand-out quarter three result. A total of 840 new apartment sales were completed in 2018, almost 30% lower than 2017.
Paul Riga, Director at Urbis, summarised, “The fourth quarter result was to be expected. With no new projects launching, buyers are essentially soaking up the current projects on the market.”
Across Inner Brisbane, new apartment launches dropped off in 2018, down by around 35% on 2017 launches. Available stock has fluctuated throughout the past two years, however after a peak in Q2 2017 with a record 3,243 apartments available at the start of the quarter, available stock has hovered around the low to mid 2000s throughout 2018.
Sales as a percentage of available stock have also dwindled, dropping to a record low of 9.4% in the final quarter of 2018. The downward movement in available stock highlights the continued absorption of this product, and importantly that demand for new apartments is still present in the market.
Whilst the depth of the investor market is still subdued, owner occupiers are the key target market, with many projects now boutique in nature and catering to the needs of a longer-term resident. This can be noted in the results, as despite the drop in the volume of sales, the weighted average sale price was significantly higher than 2017’s quarterly reports, indicating that the style and quality of stock currently selling has changed.
Whilst the latter half of 2018 saw conservative developer activity, many developers are being buoyed by the levels of sales absorption, low vacancy rates and stable growth drivers for Brisbane.
Approximately 2,000 apartments are anticipated to launch in the three quarters of 2019, and with a replenishing pipeline, it is likely we will register a pickup in sales.
“Ultimately it will be access to finance (for buyers and developers) that will temper the inner Brisbane market in the short-term,” suggested Mr Riga.
“But the drivers of demand are there, and smart developers are looking at already looking at opportunities for their next move.”