More than two thirds of Brisbane’s proposed apartment projects have been shelved or abandoned, a new report reveals.
MORE than two thirds of apartment projects planned for Brisbane have been shelved or dumped altogether, a new report reveals.
The Place September quarter apartment report shows 70 per cent of projects in the inner city’s future apartment pipeline have been deferred or abandoned as developers wait for demand to pick up again.
And developments in the application stage account for just 11 per cent of all projects, while the remaining 19 per cent are at the approval stage and awaiting construction.
There were 217 apartment sales during the September quarter — an increase of 119 per cent on the previous three months — showing the market is recovering and buyer demand starting to increase.
The average sale price was $688,134, with an increase in interest for apartments at lower price points.
Silk One in Woolloongabba was the standout performer for the quarter, recording 81 unconditional apartment sales.
There are currently 44 new large scale apartment buildings in Inner Brisbane with apartments available for sale.
Place Advisory residential research director Lachlan Walker said the number of deferred and abandoned projects was high because many developers had bought at the peak of the market.
Those developers were now sitting on their projects waiting for demand to pick up significantly again.
“That number is inflated in my opinion because people bought those sites thinking they’d be able to deliver apartments given the market was booming,” Mr Walker said.
“But because the market has tightened, it’s soaked the confidence out of many developers releasing stock.”
Mr Walker said Brisbane’s apartment market had bottomed and was in recovery mode.
“The next 12 months will remain a challenging marketplace where only good quality residential stock is going to appeal to buyers,” he said.
”Vacancy rates will tighten, rents will start to grow and on the back of that, we should start to see some price growth.
“We’re predicting 2021 will probably be the next big growth stage.”
Mr Walker said the inner Brisbane apartment market was showing some of the best prospects for price growth of all the capital cities.
The Brisbane market’s supply has dropped off the most since its peak, while population growth is above the national average and increasing.
Mr Walker said the market also offered “significantly superior rental yields” compared to Sydney and Melbourne.
“Relatively, apartments remain more affordable than they were 10 years ago, while the ratio of apartment prices to houses and other capital city apartment markets also remains below long term averages,” the report said.
“This in turn maintains the capacity for the inner Brisbane apartment market to be able to sustain an increase in prices as the market’s fundamentals continue to improve.”