Brisbane's new apartment market recorded 302 sales in the March 2017 quarter, down nearly 40 per cent from the previous quarter, according to new research by Urbis.
Despite fewer sales, the weighted average sale price has strengthened compared to a year ago. In the March 2016 quarter the overall weighted average sale price was $595,664 and in this quarter came in at $670,861 – the second highest weighted average sale price ever recorded.
Urbis also reported that foreign investor buyers are down to 4% compared to 20% one year ago.
One-Bed One-Car Dominates
One-bedroom one-car product made up the majority of sales (39%) for the first time since 2014.
Urbis Associate Director Paul Riga said some results were surprising.
“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%).”
Urbis Inner Brisbane Apartment Rental Review revealed one-bedroom one-car product are the most in demand rental type in addition to the most sold stock type.
Brisbane Apartment Local Investment Strong
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.”
Market Continues To Self-Regulate
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.”
Reduced sales and supply numbers have been noted, but we haven’t seen a noted difference in pricing across Inner Brisbane, according to Urbis.
“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.”
Urbis Brisbane Apartment Essentials Q1 2017 Snapshot
The Brisbane Apartment Essentials Report found: