27 Apr 2016

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The days of South Brisbane dominating off the plan sales could be coming to an end as supply reaches its peak in the riverside precinct.

The Urbis Brisbane Apartment Insights found the Inner South was the most active precinct over the December quarter 2015, with 795 unconditional apartment sales making up a record 56 per cent of all Inner Brisbane sales.

One of the biggest sales results was for Mirvac’s Lucid project in South Brisbane, the 30-storey sister tower to Art House.

South Brisbane from a supply point of view has started to reach its peak of what’s available and what is pending to come to market, and now developers are looking at areas outside of that.

Construction is expected to start on Lucid in May, after 96 per cent of its apartments were under offer after releasing to Mirvac clients at the end of 2015.

Despite South Brisbane’s continued strong results, Urbis associate director Paul Riga said the next six months would see activity spread across all inner Brisbane areas, but only a relatively small proportion of projects listed as future or pending were within South Brisbane.

“South Brisbane from a supply point of view has started to reach its peak of what’s available and what is pending to come to market, and now developers are looking at areas outside of that – still within the inner south, and still hanging off the coat tails of the fundamentals that South Brisbane offers – but you are in areas where land supply is a bit more available at the right price,” he said.

Mr Riga said Woolloongabba was the next area to watch, with “big players” moving in and a range of new projects on the horizon.

EPV Developments have already seen the precinct’s demand in action, where almost half the apartments in its $60 million The Wellington project sold despite launching in the traditionally slow holiday sales period.

The 127-apartment project, on the edge of Woolloongabba and East Brisbane has one and two bedroom-stock priced between $354,000 and $615,000.

East Brisbane is a high growth area experiencing increasing and ongoing demand from buyers and tenants due to the limited availability of new apartment developments.

TOTAL Property Group managing director Adrian Parsons, who is marketing the project, said buyers were coming from the Brisbane market as well as Sydney.

“East Brisbane is a high growth area experiencing increasing and ongoing demand from buyers and tenants due to the limited availability of new apartment developments,” he said.

Demand for two-bedroom apartments powered an average sale price increase of more than $25,000 for off the plan apartments across inner Brisbane.

The latest Urbis Brisbane Apartment Insights found inner Brisbane ended the year with a weighted average sale price of $626,853.

In an unusual result, the weighted average sale price also increased across all six precincts over the December quarter, ranging from an increase of $8,852 in the inner east to a jump of $82,206 in the CBD.

Mr Riga said there had been a general trend of price increases over 18 months, with a 3 to 5 per cent increase over 12 months.

“That’s telling in itself, and it’s showing that despite the competition in the off the plan market, there still has been a bit of price escalation,” he said.

“However at the same time we have noticed that construction costs have increased at double to three times that.”

Mr Riga said while further price escalation is expected up until June quarter, there would potentially by “stagnation” in price growth towards the end of 2016 as more construction completions and settlements come through.