Markets in a ‘sound’ state despite shift: PIPA
The winds of change are sweeping through the country’s real estate market, but for Property Investment Professionals o...
There are just 1,225 apartments on sale in Brisbane at the moment according to Place Advisory, the lowest number in four years.
Strong demand in Brisbane has sent stock in the new apartment market plummeting, which at the current sales rate, would supply the market for less than six months.
“With new apartment sales remaining strong and supply having fallen to a historical low, it’s evident there is a continued undersupply of new off-the-plan stock in inner Brisbane,” said Place Advisory director Lachlan Walker.
Mr Walker said that while fewer sales had been recorded over the March quarter than the record-breaking December quarter of 2013, the sales rate was still well above historical averages, being almost twice the 10-year average of 326 unconditional sales per quarter.
“While some commentators have implied the Brisbane market is likely to be oversupplied in the near term due to the proposed pipeline of apartments, in our opinion a majority of these projects will never actually make it to the open market, hence the undersupply will endure in the near term," he said.
“There is indeed a substantial pipeline of proposed apartments, today numbering 22,000, but this has existed for more than six years and is to be expected of a city whose population is set to double in the coming years.
“In reality, the lending hurdles and the banks’ tight purse strings will ensure only feasible residential projects enter sales and marketing and evolve into the construction phase.”
Brisbane has been tipped to be an investment hotspot in 2014, with leading economist Dr Andrew Wilson believing all the fundamental ingredients are there.
“The market is moderating at the moment, but we are seeing a few key areas, such as Brisbane, which are expected to buck this trend,” he said earlier this year.