Following a record breaking December quarter, the inner-Brisbane apartment market continued to perform well in the first quarter of 2014, indicating another positive twelve months could well be on the horizon.
Blogger: Lachlan Walker, Place Advisory
There were no signs of the market cooling off throughout the March 2014 quarter with a total of 639 unconditional sales made over the summer period. While this figure didn’t quite top December, it is still almost twice the ten year average of 326 unconditional sales per quarter. Brisbane has continued to experience positive market sentiment which can be attributed the overall improvement of the real estate market. The sales seen this quarter have paved the way for this pattern to continue over coming years as the Brisbane market continues its growth phase.
The Brisbane CBD recorded strong levels of unconditional sales for the second consecutive quarter. As with last time, these sales resulted from new project releases, illustrating high levels of buyer commitment. The precinct recorded a weighted sale price of $1,228,419 for the quarter; the highest weighted average of all precincts. This result reflects the high percentages of luxury owner occupier transactions. High- end building Abian by the Sunland group recorded the majority of unconditional transactions of all projects, with 108 sales for the quarter, reinforcing the return of Brisbane’s million dollar plus market. The CBD continues to remain the most limited in terms of new projects, new buying opportunities and residential supply, with only 111 developer apartments remaining for sale in the CBD across three different projects.
North of the River
Once again, the North of the River was the top performing precinct, recording a total of 404 unconditional transactions across the March quarter. This figure accounts for 63% of all sales documented during this time. The three projects with the most sales were Broadway on Ann in Fortitude Valley with 58 unconditional transactions, Proximity in Hamilton (45) and 38 High Street in Toowong (44). The success of these projects is indicative of suburbs which have been experiencing high demand in the Inner Brisbane market. While the Inner North retains the majority of supply in Inner Brisbane with 861 apartments, this is the lowest level of stock this precinct has seen since June 2010.
South of the River
The South of the River continued to illustrate a swing towards luxury stock, despite a dip in sales. Luxury apartment building Southpoint by the Anthony John Group was the top performing project in the Inner South, recording 46 unconditional transactions. The 253 unconditional sales seen during this quarter was nearly 50% less than the previous quarter, due to the lower levels of available stock and lack of new project releases. While sales results were lower, the Inner South saw a weighted sales average of $752,331 which was 35% higher than the December quarter, and this is directly reflective of the higher level of owner occupier transactions recorded at Southpoint. Although 15 projects are still being actively marketed South of the River, only 253 off the plan apartments remain for sale in this area.
While some statistics imply that the Brisbane market will be facing an oversupply in the near term, Place Advisory directly challenges these statements and believes that Brisbane is, and will remain undersupplied in the near term. While there are a substantial number of proposed apartments in the pipeline, this amount of 22,000 has now existed for over 6 years. Although there are many ‘proposed’ opportunities in Brisbane, many will be impeded by obstacles such as finance, and subsequently (in our opinion) will never make it to the open market. Low levels of stock remain in the CBD, Northern and Southern sides of the river as units continue to increase in popularity. Cranes have activated the Brisbane skyline in recent months, proving the increased sales activity has undoubtedly stimulated development. We look forward to the ongoing improvement in sentiment and the change to be delivered to the market in the years to come.
About Lachlan Walker
Lachlan Walker is head of the Place Advisory division at Place Projects, Brisbane’s premiere project marketing company. Lachlan is recognised as one of Queensland’s preeminent residential property market experts, specialising in South East Queensland residential property.
His role is to provide product specific advice to clients by gathering and applying internal and external market intelligence which is translated into meaningful market reports. He is widely published and is continually called upon to provide commentary on the residential market by various media and property journalists nationally.
Lachlan has extensive experience in property market research and has provided professional consultancy and advisory services to leading property clients including the likes of Leighton Properties, Lend Lease, Watpac, FKP, Brisbane Housing Company and Consolidated Properties.
Visit www.placeprojects.com.au for more information.