FORGET apartments, Brisbane is about to be swamped with a different type of attached dwelling — prompting fresh oversupply fears.
As the inner-city unit sector flounders, industry experts say developers are turning their attention to townhouses, with a new wave of residential projects set to saturate the market in 2018.
New research by PRDNationwide reveals the number of townhouses in greater Brisbane is set to surge by nearly 250 per cent this year, with construction scheduled to start on more than 5400 new townhouses.
In comparison, there is set to be a 170 per cent increase in the number of new apartments predicted to hit the market this year.
It comes as recent building approvals figures from the Australian Bureau of Statistics revealed townhouse approvals are at their highest level in 20 years, as the country’s ageing population seeks to downsize.
Real Estate Buyers Association of Australia Queensland representative Zoran Solano predicts Brisbane is facing a townhouse glut over the next two to three years.
Mr Solano, who is a buyer’s agent with Hot Property Buyers Agency, said he had been dealing first-hand with many developers who had been snapping up sites around the city for townhouse developments.
“We’ve seen an unprecedented amount of apartment settlements in recent years, so it’s getting harder and harder for developers to sell that product,” he said.
Mr Solano said he had noticed a trend in developers shifting to lower-density development opportunities such as townhouses and house-and-land subdivisions, particularly within a 20km radius of the CBD.
“There’s been a lot of transactions over the last 18 months and a lot of development applications and approvals of this lower density style product, which I believe has the potential to oversupply some pockets of our market,” he said.
Mr Solano said pockets of Brisbane around McDowall, Doolandella, Ellen Grove and Pallara were experiencing high rates of housing development and had the potential to become oversupplied markets.
“There are arguments to show this is already happening, but now we’re seeing it even more as developers move away from units,” he said.
Mr Solano said townhouse investors should be cautious in the current market, with some of his clients having to pay the difference between the purchase price and the valuation of their townhouse.
“These properties are being sold at overinflated prices and then not valuing up to contract price” he said.
“Be cautious about the length of settlement, speak to your bank about your finance situation and if there is a discrepancy with the valuation, see if it is something they can withdraw from the contract.”
But PRDnationwide national research manager Diaswati Mardiasmo said she was not concerned about the expected increase in supply because of the spread of proposed townhouse projects across the city — from Carina to Calamvale in the south and Albion to Aspley in the north.
“A lot of apartments have been focused on inner Brisbane, whereas if you look at the townhouse projects due to commence in 2018, they’re more spread out,” Dr Mardiasmo said.
“I’m seeing a lot of developers focusing on townhouse projects within walking distance to schools, shops and family-friendly amenities as opposed to being concentrated in the city.”
Dr Mardiasmo said the townhouse market was also more insulated than the apartment sector because of the change in family composition in Brisbane since the 2011 and 2016 Censuses.
She said the number of couple families with children had increased and that demographic would generally choose a townhouse over an apartment because of livability factors such as increased room and yard space.
AREAS OF HOUSING SURPLUS IN QUEENSLAND
Region Surplus dwellings % stock
1. Brisbane Inner 4,537 12.7%
2. Townsville 4,259 5.3%
3. Cairns — South 3,516 8.1%
4. Gladstone — Biloela 3,384 9.4%
5. Surfers Paradise 2,878 12.3%