Despite fewer sales, the weighted average sale price remained steady at $670,861, only a $2,420 decrease compared to the December 2016 quarter and the second highest weighted average sale price ever recorded.
Additionally, for the first time since 2014 one-bedroom one-car product made up the majority of sales at 39 percent of total sales. Despite the sales slowdown, only 21 fewer apartments were sold compared to the previous quarter.
Urbis Associate Director of Property Economics and Research Paul Riga said that fewer sales were expected with the first quarter of the year traditionally lagging.
“This quarter we saw some survey results which the market didn’t anticipate, in addition to others we knew were coming,” Mr Riga said. “Firstly, one-bedroom one-car product took on the two-bedroom market. These one-bedroom sales were split across a range of developments and precincts, the majority being evenly split between the Inner South (26%), Inner West (24%) and Inner North (22%).”
Mr Riga said that the popularity of one-bedroom apartments makes sense, with Urbis Inner Brisbane Apartment Rental Review revealing one-bedroom one-car product are the most in demand rental type.
Mr Riga explains, “Developers need to look close to home and deliver product attractive to the local investor and owner occupier. The split between owner occupier (19%), local investor (26%) and interstate investor (32%) purchases remained relatively even. However, over the last 12 months foreign investor buyers has gone down from 20% to 4%. With regulatory changes to our lending, we were expecting this decline.”
“There were more sales than apartments launching to market – this is a good thing as it allows absorption of active product already selling.
New apartment supply decreased in line with the decline in sales, with just 225 units launched this quarter compared to 668 in the previous quarter.
There were more sales than apartments launching to market – this is a good thing as it allows absorption of active product already selling.
“We will continue to see a slowdown in supply,” Mr Riga said. “Once again apartment approvals dropped to 1,299 units – the lowest number we have recorded since 2014. It is important that the market continues to self-regulate.”
Mr Riga noted that though we have seen reduced sales and supply numbers, we haven’t seen a noted difference in pricing across Inner Brisbane.
“One-bedroom one-car product pricing did decrease by $20,000, which may have contributed to the increase in sales but it was also location and product specific,” Mr Riga said. “However two, three, four bed and penthouse product all registered an increase in the weighted average sale price.”
“The market has changed, however the value of new inner city apartment product has held firm. I don’t expect to see any drastic reduction in price, especially for quality new product in inner city locations. This will continue to be attractive to a variety of buyers including first home buyers, down sizers and investors.”
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