Brisbane's inner apartment market has recorded the lowest level of transactions since 2012's December quarter, but one region has seen prices grow 12 per cent from the previous quarter, according to Place Advisory's June Quarter Inner-Brisbane Apartment report.
The CBD recorded the highest weighted average sale price of all precincts across Inner Brisbane, which is a direct result of higher end owner occupier transactions and higher prices achieved in Skytower and Mary Lane. Skytower saw the highest number of unconditional sales across the CBD apartment market throughout the June 2016 quarter, recording a total of only 15 transactions, according to the report.
Brisbane's wider 'inner region' recorded a total of 464 unconditional apartment transactions during the June 2016 quarter while the weighted average sale price softened to $586,315, reflecting a 3 per cent decrease on last quarter’s weighted average price.
Only four new projects were released during the quarter totalling 451 additional apartments, recording a total of 464 unconditional sales and a decrease of 44 per cent from the March 2016 quarter which recorded 828 unconditional transactions.
Fortitude Valley's Henley Towers was the top performer in Brisbane for the quarter with a total of 123 unconditional sales. Other top performers included New Deshon and Night Edge, each recording 30 unconditional transactions for the quarter.
Of the remaining stock for sale over these four developments in the CBD, the majority is made up by two bedroom apartments (39%), one bedroom apartments (33%) and three bedroom apartments (25%). Sub penthouses and penthouse apartments make up just 3% of remaining stock. As at the end of June 2016, the Brisbane CBD still remains the most limited precinct in terms of new projects, new buying opportunities and residential supply. Compared to other precincts, there is very little comparative options to purchase.
A total of 219 unconditional transactions were recorded with a weighted average sale price of $591,324. This reflects 9 per cent price growth compared to 12 months prior. 759 apartments currently remain for sale out of 5,088 new apartments across the precinct representing 10 months’ supply on the current sales rate.
Artist's impression, Henley TowersSouth of the river
221 unconditional transactions were recorded during the three month period ending June 2016. This is a substantial decline of 57 per cent from the previous quarter, which recorded a total of 511 transactions.
The 'south of the river' market spanning 40 projects recorded a total of 221 unconditional transactions with a weighted average sale price of $554,638.
Brisbane's WoolloongabbaOverall popular stock and pricing
The majority of transactions were recorded between $450,000 and $550,000, accounting for 30 per cent of total transactions.
Two bedroom apartments accounted for the majority of unconditional sales over the period, representing 62 per cent of total sales. As we enter a new market and normality returns to off the plan sales rates, Place Advisory expects the Inner Brisbane market to stabilise.
Project deferral on the rise
The June 2016 quarter saw the overall number of new development applications decline while development approvals and deferred projects increased. The most significant change was the increase in deferred projects throughout the quarter at 34 per cent deferral rate. This is an increase of 15 per cent over the March quarter, which recorded only 19 per cent of deferred projects.
Developer Tim Gurner will wait to develop his 156-162 Alfred Street project until the next cycleInvestor confidence
One of the most significant shifts that has been seen in the 2016 Investor Sentiment Survey is the increase in market uncertainty. Market uncertainty has grown significantly over the past two years, increasing from just 38 per cent in 2014 to 53 per cent in 2016.
But despite increased market uncertainty and lower improvement rates in the market, investors are still optimistic regarding expected capital growth. While the majority of respondents (36 per cent) expected to achieve between 4 per cent and 6 per cent capital growth, 31 per cent of respondents expect to achieve above 8 per cent growth on investments.
Long term outlook
Place Advisory expects strong financial backing will result in Brisbane delivering higher quality residential projects. This 'normal market' will see those who are not full time developers and industry professionals defer until the next property cycle.