Green Shoots in Brisbane Apartment Market: Urbis

Brisbane’s new apartment market saw 420 sales in the September quarter, the highest level of sales recorded since December 2016, reveal Urbis.

The weighted average sale price recorded for the third quarter was $733,000, with one third of sales made in projects positioned toward the middle to high end of the market, according to Urbis’ national survey, the Apartment Essentials.

Perhaps surprisingly, investors emerged as the dominant buying force for the period.

Urbis director Paul Riga attributes this to “the scale, location, and targeting of the projects launched” leading to an increase in the proportion of investor purchasers in the quarter.

Developers’ are putting in work

Brisbane’s inner-east registered as the most affordable precinct with a weighted average sale price of $519,000, while Brisbane’s CBD was the highest with a weighted average topping $1.1 million.

The inner-south had a total of 363 sales thanks to two major projects which launched in the precinct, this figure accounts for 82 per cent of Brisbane sales for the quarter.

While it sounds good, Riga says there’s hard work taking place behind these figures.

“The process to engage buyers is a long, tough one,” he said.

“Despite the higher transactions in this quarter, sales are certainly not easy and for all developments recording strong results in this quarter it has been on the back of extremely hard work, and for some developers, many years of building trust with buyers.”

Interstate investors spiked to 54 per cent while owner-occupiers dropped to 15 per cent, with local investors making up a further 14 per cent.

“The increasing number and proportion of investor purchasers across a variety of projects is an indication that longer-term confidence still exists for the inner Brisbane apartment market,” Riga said.

“Recent investments, stable prices, tightening vacancy rates and relatively strong yields are core drivers for these investors.”

Despite the lower proportion, the number of owner-occupier sales increased over the quarter.

“The continued growth in the owner-occupier market highlights a maturing inner Brisbane apartment market, with purchasers increasingly seeking the benefits of the apartment lifestyle.”

Nationally, ABS stats recorded building approvals increased by 3.3 per cent in the month of September led by a rise in the apartment sector.

While apartments and townhouses climbed 9.2 per cent in the month, the increase followed the 21.9 per cent tumble from the same month a year earlier.

Supply

While the quarter enjoyed strong sales results, Riga believes it’s unlikely a significant change to potential supply will be seen.

Approvals dropped in the quarter with a total of 403 apartments approved across Inner Brisbane, this figure down from 1,674 the previous quarter.

Four projects are expected to launch in the next six months, which will bring around 950 new apartments to market.

“We are not expecting continued quarters of sales at this level due to limited levels of new supply, however, overall this quarter has highlighted there is still demand in the inner Brisbane apartment market and the right drivers are present,” Riga said.