THE tide has turned for Brisbane’s luxury apartment market, with a new report revealing riverfront unit prices are nine per cent higher than they were a year ago.
THE tide has turned for Brisbane’s luxury apartment market, with a new report revealing riverfront unit prices are nine per cent higher than they were a year ago.
The average sale price for a riverfront apartment is now $730,000, fuelled by demand from cashed-up owner-occupiers lured by their scarcity and prestige, according to the Place Advisory Riverfront Apartment Report, released exclusively to The Courier-Mail.
More waterfront apartments changed hands at higher prices in 2018, with 31 per cent of all riverfront units in Brisbane selling for more than $1 million.
The suburb with the highest number of riverfront apartment sales in 2018 was Kangaroo Point at 67, with New Farm having the highest average sale price of $1.219 million.
Place Estate Agents managing director Judy Goodger said cash-ready buyers were showing interest in quality, boutique stock on the city’s riverfront.
“Buyers are willing to pay a premium for Brisbane’s riverfront lifestyle, with locations like New Farm and Kangaroo Point in high demand,” Ms Goodger said.
“Now more than ever, Brisbane’s riverfront has become one of the most highly-sought after lifestyles in the state, with a vast number of entertainment precincts, restaurants and bars opening creating a vibrant atmosphere for those who enjoy wining and dining.
“Less stock is coming to the market, which is driving competition in the riverfront apartment marketplace.”
Billions of dollars worth of urban development in the inner city, such as the $200 million Howard Smith Wharves precinct and the $3 billion Queens Wharf project, is making riverfront living even more attractive.
The most expensive riverfront apartment to sell in Brisbane last year was the $6.5 million paid for a full-floor unit in the Aquila complex at 91 Moray St, New Farm.
The unit on the top floor of the building has just settled for a confidential price believed to be under $6 million.
Another big sale last year was the $4.5 million paid for a four-bedroom, 383 sqm apartment in Walan in Scott St, Kangaroo Point.
Another unit in the same building is on the market for offers in the mid $4 million range.
Sales volumes slipped slightly to 135 sales in the second of last year, but despite this, waterfront apartments have increased their market share of all inner city apartment sales — from a low of 4.58 per cent in the second half of 2015 to 8.24 per cent now.
In comparison, non-waterfront apartments are 5.7 per cent lower than they were in the same period 12 months ago and now sit at 2013 levels.
The Johnston Dixon 2019 River Report revealed there were 27 apartment sales over $2 million downstream from the Brisbane CBD this year, compared to three upstream.
Last year the ratio was 33 to five.
Place – Kangaroo Point … Simon Caulfield recently sold a penthouse off-the-plan in nearby Balmoral for $2.8 million.
The apartment in the boutique development at 47 Collings Street has its own private wine cellar, pool and terrace.
Mr Caulfield said Balmoral was known for having high-net worth individuals and flashy houses, but luxury apartments were not as common.
He said another apartment in an older building nearby had sold for $3.35 million last year, suggesting there was a hunger for quality units in the prestige suburb.
BRISBANE RIVERFRONT APARTMENT SALES
Suburb Number of waterfront sales Average sale price
Kangaroo Point 67 $1.055m
New Farm 54 $1.219m
West End 38 $865,776
St Lucia 25 $944,620
Teneriffe 21 $745,310
(Source: Place Advisory, PriceFinder)
The Inner Brisbane market is in the midst of change as it begins its transition into a new cycle despite the headwinds which remain with strict lending policies implemented by banks impacting sales volumes market wide.
The Inner Brisbane apartment price have begun to stabilise, aided by increased demand from population growth and comparatively affordable property prices with some market segments out performing.
In this report, Place Advisory has analysed apartment sales within a 5km radius of the Brisbane CBD and broken them down into non-waterfront and waterfront sales,
Focusing on the Waterfront market, we begin with a look at performance over the past 10 years, where the apartment market is heading and some market highlights.
Given the current property climate, lending policies and pending federal election sales volumes and investor activity are expected to remain subdued in the short term as the wider market gradually recovers.
However, the significant reduction in sales volumes from the market peak and a slowing rate of decline, suggest that the market has for the most part already adjusted.
This suggests that sales volumes will not fall much further and should begin to increase as the market moves through its natural cycle.
Inner Brisbane is expected to see low levels of new apartments physically enter the marketplace within the next few years, particularly post 2019, which when combined with the strong population growth currently occurring, will create further competition for property.
As this occurs, the desirability of waterfront properties should see them outperform non-waterfront properties, causing the price differential to return to previous highs.
This view is supported by our findings of a sustained shift toward higher quality and more expensive new apartments as owner occupiers become more prevalent in the market place
We have broken down the Inner Brisbane 5km ring and analysed the performance of the waterfront and non-waterfront apartment market. The results have shown that that waterfront apartments have been outperforming over the past few years, seeing median prices approach previous highs.
The Oz yarn –
Premium Brisbane riverfront absolute riverfront house sales plummeted 20 per cent while the number of house sales priced in the $2m-plus bracket dipped to just 27 in 2018 down from 39 in 2017 and 36 sales the previous year.
On a brighter note the average riverfront house sale price saw a 9 per cent increase to $3.255m last year, up on 2017 when a riverfront house sale averaged $2.972m.
“Average absolute riverfront house prices are now less than 10 per cent off their 2010 immediate pre-flood peak of $3.545m, says agent John Johnston, after releasing the Johnston Dixon 2019 River Report to The Weekend Australian this week.
“There were 27 sales recorded over $2m in 2018, 30 per cent down from the all-time record of 39 recorded last year and the lowest number since 2013 when there were 21 sales,” Johnston says.
Top-performing Brisbane riverfront suburbs include Hawthorne, Bulimba, Chelmer, Indooroopilly and St Lucia. Chelmer regained its crown as the best- performing suburb when it notched up 10 sales totalling $28.55m at an average price of $2.855m. It is back on top for the first time since 2012, knocking off recent favourite Hawthorne.
Hawthorne, however, took top spot for average absolute riverfront sale price at $6.584m.
The report shows there were eight riverfront sales in the $2m to $3m bracket in 2018, seven less than the 15 sales recorded at that level in 2017.
But there were three sales priced at over $7m, a substantial improvement on just the one sale recorded each of the previous three years.
On the apartment side, the top-performing suburbs for sales of apartments priced at more than $2m were New Farm, Kangaroo Point and Brisbane City.
“Less than one in 2000 people in Brisbane can now claim ownership of an absolute riverfront house or block of land. And as the current total of just 800 freehold titles dwindles each year with redevelopment that number will soon blow out to one in 3000,” he adds.
Riverfront sales director Josephine Johnston-Rowell says while turnover on the river is significantly down on the previous year, “when you take into account the curve balls thrown at the market over the year, the banking royal commission that saw banks greatly stem the flow of credit for all types of property not the least of these, all in all 2018 panned out better than expected”.
“What was particularly encouraging was that while most of the action in 2018 was at the lower end of the market where 29 of the 39 absolute riverfront house sales recorded were for less than $4m, the average across all riverfront house sales still managed to rise strongly to break through the $3m mark and be within 10 per cent of the all-time record,” Johnston-Rowell says.
“With so many of Queensland’s economic fundamentals again coming together in unison with ever-lower interest rates, banks keen to start lending again, and a strong resurgence in net migration, 2019 could be the year we see the average riverfront house price test new record territory.”
Originally published as Tide turns for riverfront units