By Paul Riga | 7 Sep 2018

The average sale price of new apartments in Brisbane is on the rise, according to new data released today by leading city shapers, Urbis.

Despite sales dropping from 154 to 130 between Q1 and Q2, this quarter saw a $137,000 increase in the weighted average sale price to bring it to $817,000, the highest weighted average sale price ever recorded by Urbis’ Apartment Essentials. This increase was driven by the high average sale price recorded in the Inner East precinct ($1.33 million) and Brisbane CBD ($1.73 million).

Owner Occupiers accounted for 38% of all buyers in the quarter, while local state investors and interstate investors stayed low at 16% and 13% respectively.

Paul Riga, Director Property Economics and Research, said, “The owner occupier purchases were firmly responsible for the increased price-points for the quarter.

“Importantly, the majority of these sales are in projects that are in presale stage or under construction – indicating that buyers are becoming more willing to transact off-the-plan if the right opportunity presents itself.”

The Inner South and Inner North precincts each captured one third of the total sales, with 32 and 33 sales respectively. These two precincts are the most affordable captured in the survey; the Inner North recording an average sale price of $569,000 and the Inner South, $676,000. This is likely due to the high proportion of one-bedroom product in both precincts, which currently account for over 40% of future apartment supply.

Approvals bounced back in the quarter with a total of 1,674 apartments approved across Inner Brisbane. This brings the total approved future supply for the Inner South to 8,481 apartments, while the Inner North follows closely behind with 7,653 approved apartments.

Whilst there are plenty of apartments in the potential pipeline, only 9% are currently selling to the market, begging the question as to what will happen next quarter. Three to four projects are expected to launch next quarter, bringing circa 800 new apartments to market.

“It’s not getting any easier for developers launching new projects, so we aren’t expecting launches to increase over the coming quarters.

“Any new launches have to contain a real selling point, a point of difference, and this has resulted in some exciting potential projects expected over the coming 12 months.” stated Mr Riga.

Despite the continued low level of off-the-plan transactions, there is still demand in the Inner Brisbane apartment market. Whilst limited levels of new supply are keeping transaction levels subdued, primary research into resales of recently completed developments indicates significant interest and take-up.

“Resales of new product is certainly impacting the overall demand, but it also highlights that interest in Brisbane is still present, with positive investment and employment drivers giving buyers, particularly investors, added confidence.” Mr Riga concluded.