Almost half the apartments approved for development in Brisbane are not expected to be built, after sales last year fell to less than half the record rate of 2015.
Place Advisory’s latest Inner Brisbane Apartments market report said a total of 25,125 apartments across 110 projects were approved but 44 per cent were not being actively marketed.
Sales rates have returned to Brisbane’s 10-year average, with a 60 per cent drop in the number of sales in 2016 compared with the record numbers of transactions in 2015.
“Overall, 2016 has been a considerably tougher market in comparison to recent years,” the report said.
“The effects of the 2016 federal election and the uncertainty surrounding policy changes, combined with the introduction of new lending policies for purchases and stamp duty changes for foreign buyers, all exemplified market uncertainty throughout the year.
“When combined with oversupply speculation, these factors ultimately forced market change and resulted in softer sales.”
The report shows the apartment development rollercoaster the city has experienced. In 2011, there were 49 projects marketed, resulting in 1278 unconditional sales. By 2014, that had risen to 84 projects and 4128 sales. In 2015, there were 86 developments and 5366 sales. Last year, this had dropped to 81 projects but 2149 apartment sales.
The approximate value of all sales dropped from $3.19 billion in 2015 to $1.3bn in 2016.
Place Advisory said competition would remain strong between developments — with little capital growth anticipated — while site sales were also increasing as developers struggled to fund cash flow.
Restrictive lending practices would also spur private lending solutions.
The report comes as Urban Construct submitted a proposed revision to its application for a staged six-tower site at Woolloongabba, requesting the development time frame be extended from six years to 10 years.
“As a result of the downturn in the market and the
oversupply of units within the inner-city market, the development of the Logan Road site currently is not feasible,” it said.
Developer BQT Projects has also requested a three-year extension for its 2013 approval for a 41-unit South
Originally Published: http://www.theaustralian.com.au