Unit demand outpacing supply
An influx of apartments in inner-city Brisbane has still failed to match the high level of demand seen in the area, a local advisory firm has stated.
Over the June quarter, 1,083 unconditional apartment sales were recorded across inner Brisbane, the highest for any single quarter, according to data from Place Advisory.
In the same period, 14 new multi-dwelling projects were launched, incorporating 1,398 apartments.
Total gross sales for the period came to $589 million, three times the 10-year average.
However, Place Advisory believes more buyers are coming to the market, putting pressure on stock levels.
“Demand is continuing to outmatch current new inner-city apartment supply,” the report stated.
At the close of the 2014 financial year, 1,503 apartments were currently on the market.
“Based upon the sales rate recorded during the June quarter, this translates into a market supply of only 4.2 months,” the report stated.
Low interest rates and affordability are attracting interstate and international investors, according to Place Advisory.
In addition, an uptick in local sentiment has brought more owner occupiers to the off-the-plan sector.
These trends are likely to cause a shift towards family-friendly units.
“As local enquiry continues to improve, we expect to see greater volumes of two- and three-bedroom product transact," the report stated.
"Although, one-bedroom demand will be ongoing we predict there will be a gradual shift away from this stock over the next two years."
In coming months, Place Advisory predicted prices would begin to climb after a prolonged slump.
“Prices, which have to date remained relatively stable for almost two years will begin to grow, reflecting the demand for larger, more liveable owner-occupier product,” the report stated.
Make sure you never miss an episode by subscribing to us now on iTunes
And dont't forget to leave REB a review!
Listen to other installment of the Real Estate Business Podcast