Demand for Brisbane apartments is set to rise
4th March 2008
The coast may be fashionable but Brisbane remains the most popular location for interstate migrants, attracting the largest proportion of Sydneysiders ready to call Queensland home.
Grant Dearlove, the managing director of PRDnationwide, says the city's popularity is about lifestyle. "Brisbane is still a town that doesn't have the big city feel about it; it's a growing city but it's still a city people enjoy living in.
"They like to go to cafes, it's a very outdoor culture. When you take into consideration the climate, lifestyle, people, and the friendly nature, it's a great place to live."
Tim Lawless, the residential research director for RP Data has a similar view. "Residents from areas outside of Queensland are attracted to the climate and lifestyle, a strong economy with strong jobs growth, and a relatively higher level of housing affordability compared with Sydney and, to a lesser extent, Melbourne," he says "New residents who once lived in Sydney are typically still of working age and move within commuting distance of the Brisbane CBD."
Lawless says Sydneysiders find Brisbane prices comparatively cheap and can often afford to upgrade their home and live closer to the city, or within a lifestyle precinct they could only dream about in Sydney.
Apartment marketer Terry Taylor, of Which Property, says with the state's sound economy people are investing in Brisbane. "There are so many jobs for people with tertiary qualifications and we have plenty of vacancies in mining and tourism."
The growth in employment has affected housing supplies, says senior BIS Shrapnel economist Jason Anderson.
"There has been a huge amount of employment growth in south-east Queensland, particularly in office markets," Anderson says. "Vacancy rates in Brisbane are negligible and there has been a lot of office construction. Sites once mooted for residential use are snapped up for offices."
As a result, Anderson says, there is little new apartment construction happening and supply is very constrained.
"Office construction is going to draw a lot of people into the CBD for work, and demand for accommodation in inner-ring suburbs is going to increase sharply over the next two years," he says. "There are not going to be enough new apartments for them to occupy."
He says this situation means the outlook for inner-Brisbane apartments is positive. He also predicts a perception shift in the value of apartments in the middle and outer suburbs.
"We'll see more construction and acceptance of the value of having new apartments in middle and outer-ring suburbs close to transport infrastructure," he says. "There's not going to be enough rental housing in the inner ring, so demand will spill into the middle ring. This will change people's expectations of returns over the next two to three years."
Developers are gaining a better understanding of what is selling in today's market, and some are concentrating on producing what they know will sell. Colliers International research analyst Alison Timchur says a trend in Brisbane is for smaller households, especially in the inner suburbs. There has been a noticeable increase in lone-person households and couples without kids.
"The recent stockmarket jitters might see more investors returning to the 'tried and true' property market," Timchur says. "With so many new unit projects about to launch in the Brisbane market, developers will need to keep their fingers on the pulse and make sure they are providing what the market wants.
"Things are going to get competitive this year."
PRICES SOAR FOR NEW UNITS
The average price of a new unit within five kilometres of the Brisbane CBD rose from $597,000 in June last year to $725,417 in December, an increase of 21.5 per cent.
The figures were released by Colliers International Brisbane research analyst, Alison Timchur, who reports there are at least 10 big projects due to hit the Brisbane market this year.
These 10 developments account for more than 2400 units, with a building cost of $2.8 billion. More than 50 per cent are expected to be two-bed units, with a further 35 per cent one-bedders.
Timchur says this highlights how developers have been guided by market activity last year to determine current and emerging living trends, and are planning new developments to cater for the expanding single and couple inner-city market, which has dominated the Brisbane marketplace during the past year.
"One thing we may expect to see in 2008 is the continued escalation of new unit prices, driven by factors such as increased demand, larger living spaces and the increasing popularity of inner-city apartments for owner-occupiers and investors alike," she says.
A TOWER POWER
At 287 metres, it will be Brisbane's tallest building when it is complete in 2011 and has already 70 per cent of the 401 residential apartments have been sold.
Vision, a $700 million Austcorp Group development, is between Mary and Margaret streets in Brisbane's city centre and is a mixed-use building that includes 28,000 sq m of commercial space, a civic and retail plaza and Brisbane's first observation deck.
Apartments range from one-bedroom designs through to four-bedroom plans, with sizes from 50 sq m to 253 sq m and prices from $507,000 to $4,123,000. For sales information, phone 1800 556 196.
THE ONLY WAY IS UP
· A PRDnationwide Brisbane unit report shows 2007 was a turnaround year for Brisbane's new apartment market.
· After the slowest year in more than a decade, there was an upswing of activity in new unit sales last year.
· During the year, $732 million of new apartments were bought and sold in inner Brisbane (a total of 1065 units).
· The average price of a new unit in inner Brisbane during last year was $687,000.