Real Estate

half of new brisbane apartments worth less than what they sold for but aeoeworst is overae

Written by The ReReport

More than 1300 new apartment projects are set to be completed over the next two years in Brisbane, according to CoreLogic. Image: AAP/Darren England.

EVERY second new apartment sold in Brisbane in the past year is now worth less than what it changed hands for, but developers and owner-occupiers have not lost confidence in the city’s unit market.
More than 1300 new projects are set to be completed over the next two years and strong sales are being recorded for high quality apartments, according to a new report.
The latest Settlement Risk report from property researcher, CoreLogic, reveals that since mid-2017, more than 50 per cent of off-the-plan apartments in Brisbane have settled with a valuation lower than their original contract price.

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But industry players say “the worst is over” and the appetite for high-end apartments, an increase in interstate migration, low prices and generally higher than average rental yields should support a further recovery in the Brisbane apartment market.
Projects like ‘The Standard’ by Aria Property Group in South Brisbane are almost sold out, with 234 of the 268 apartments sold in six weeks and only 15 remaining for sale.

‘The Standard’ is a new residential project by Aria Property Group in South Brisbane. Image supplied by Aria Property Group.

Other major projects underway include 1,141 units in ‘Sky Tower’ in Mary Street, which had five off-the-plan sales in the September quarter, according to Place Estate Agents.
And Stage 1 and 2 of the Brisbane One Towers in South Brisbane, which will comprise 608 units, along with the 84-storey ‘The One’ tower.

The One at 300 George Street, Brisbane,“The One” at 300 George St, Brisbane, will feature 476 apartments including three two-level penthouses. Supplied by Multiplex.

New supply due to come online in the next two years will be concentrated in the inner city precincts of the CBD, Fortitude Valley, Bowen Hills, Newstead, Hamilton, Holland Park and Yeronga, but also Forest Lake, Redcliffe and Wynnum-Manly.

Suburbs with largest potential development pipeline in next 2 years, according to CoreLogic.

CoreLogic national research director Tim Lawless said the construction cycle for new apartments in Brisbane peaked about two years ago, which had given the market time to absorb excess stock.
Mr Lawless said increased interstate migration to southeast Queensland had also helped.
“I think the worst is behind the new apartment market in Brisbane,” Mr Lawless said.
“We’ll see a better performance for new apartment stock geared toward the owner-occupier market.

rpdata Research Director Tim Lawless pictured in Sydney on Monday.CoreLogic national research director Tim Lawless.

“I think apartments that have a more concentrated focus on investors, particularly foreign investors, will probably find their markets are a bit smaller than what they used to be and potential purchasers might find it harder to obtain finance.”
Mr Lawless said off-the-plan unit buyers who were confronted with a valuation lower than the contract price may need to top up their deposits in order to meet the lender’s loan-to-valuation ratio requirements.

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From the ground, BrisbaneBrisbane’s tallest building, ‘Skytower’, from the ground looking up.

A new report from Place further cements views the Brisbane apartment market is recovering, with the average sale price of a unit in the city during the September quarter rising 17 per cent to $790,489 — driven by owner-occupier demand for high quality apartments.
Place residential research director Lachlan Walker said the inner Brisbane apartment market continued to be affected by tight lending conditions, but buyer demand — particularly from owner-occupiers — was steadily absorbing available stock.
Aria Property Group design manager Simon White said the owner-occupier market was “very strong”, particularly downsizers.
“The majority of resales have been to owner occupiers, with average price growth over the 69 Aria unit resales since 2015 being $74,000/unit,” Mr White said.
“The local downsizer market is very strong, particularly in inner urban areas such as South Brisbane and Kangaroo Point, where people want to be close to everything, but also don’t want to have a backyard to maintain.”

‘The Standard’ is a new residential project by Aria Property Group in South Brisbane. Image supplied by Aria Property Group.

But RiskWise Property Research CEO Doron Peleg warned the risks associated with buying off-the-plan units would become even greater if changes to negative gearing and capital gains tax were implemented if Labor won the next federal election.
Mr Peleg said there would be reduced demand to buy rental properties due to the creation of primary and secondary markets, and that would cause new home prices to fall in many regions.

– 7 unconditional transactions with a weighted average price of $1.196m
– Sales volumes remain at low levels throughout the CBD in line with limited stock
– ‘Skytower’ recorded the most sales, with five apartments being sold off-the-plan during the quarter 2018. The other remaining two sales occurred in ‘Mary Lane’.
– There are 268 new apartments for sales throughout the CBD precinct.

Incredible views of the CBD from BrisbaneIncredible views of the CBD from Brisbane’s tallest building in Margaret St “Skytower”.

– 93 unconditional transactions with a weighted average price of $680,376
– ‘Gallery House’ stages 1 and 2 had the most expensive off-the-plan apartments sold
– The top sale was a four-bedroom penthouse apartment that sold in the $2.595m price bracket
– The majority of sales during the quarter were between $350,000 and $450,000
– At the end of the quarter, there were 699 apartments remaining for sale
– There are 699 new apartments for sale throughout the precinct.

Inside the bathroom of one of the apartments in the Gallery House project.

– 268 unconditional transactions with a weighted average price of $818,097 — the highest recorded weighted average sale price for the precinct since 2010
– This was heavily influenced by Aria’s new development ‘The Standard’ in South Brisbane, which sold 234 apartments in the quarter
– The majority of sales were between $750,000 and $900,000.
– 772 apartments remain available for sale throughout the inner south precinct

‘The Standard’ is a new residential project by Aria Property Group in South Brisbane. Image supplied by Aria Property Group.

(Source: Place)

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