A new residential report from global property services firm, JLL predicts an upcoming supply of approximately 20,000 apartments in Brisbane over the 2016-2018 period. It will be the first time such a large amount of stock comes online in the inner city precincts in such a short period of time.
JLL’s October Brisbane Apartment Market Indicators Report states that of the estimated 19,800 apartments that are either currently under construction or being marketed within the inner city precincts of Brisbane, approximately 13,600 are expected to complete during the 2016-2017 time frame.
JLL’s Head of Residential Development Valuations, Troy Linnane said, “The Brisbane apartment market has continued to flourish off the back of strong investor demand, as interstate and foreign investors seek to take advantage of the lower price point and higher yields Brisbane currently has to offer compared to capitals like Melbourne and Sydney.
“Interstate purchasers are currently dominating the market, accounting for over half of the off-the-plan apartment sales within the inner precincts, whilst foreign purchasers (25%) and local purchasers (22%) make up the balance over the past year,” said Mr Linnane.
JLL’s Director of Residential Research, Rupa Ganguli said, “Due to its value proposition and higher yields, we expect Brisbane will continue to experience steady demand for residential product across all the inner city precincts.
“However, we do anticipate the investor market will moderate over the next 12-18 months, as large numbers of new apartments enter the rental market during 2016-2017.
“This will have impacts for the ‘investor type’ stock but opportunities will be available to those developers focused on the high-end, owner occupier market.
“Sydney and Melbourne have witnessed an increase in high density living and Brisbane is following suit. For the 2015 financial year, apartments made up over 45% of all approvals to build new private sector dwellings, which was a record high. A combination of low interest rates, improving market confidence and relatively affordable price points, particularly for investor buyers, have led to housing prices reaching a historical high in Brisbane.
“In the owner-occupier market, this has provided home-owners with an ideal opportunity to sell their existing dwellings and make a successful transition into a new smaller residence.
“Given the intensity of competition and future supply, some developers have moved away from the highly competitive investor stock and are focused on smaller owner-occupier projects where there is currently strong demand from couples seeking to down size from their existing suburban homes and development funding is more readily available,” said Ms Ganguli.
Originally published on: http://www.theurbandeveloper.com/