Ensure you never miss an issue of the
real estate business bulletin
Colliers optimistic about Brisbane apartments

Colliers optimistic about Brisbane apartments

by Simon Parker 0 comments

A fall in purchases of new apartments in Brisbane has done little to quell Colliers International’s optimism in the sector over the next 12 to 18 months, on the back of expected investor demand.

A fall in purchases of new apartments in Brisbane has done little to quell Colliers International’s optimism in the sector over the next 12 to 18 months, on the back of expected investor demand.

“While transaction volumes declined 15 per cent to 366 over the three months to the end of September, they are still well above the five-year quarterly average of 255, and we expect these figures to be revised upwards once settlement data becomes available for all projects,” said Andrew Roubicek, Colliers International Brisbane residential director.

According to the Colliers International Brisbane Apartment Research and Forecast Report, there is likely to be around 2,000 to 2,500 new apartments released for sale over the next 12 to 18 months.

Colliers said most of this supply consists of one and two-bedroom apartments targeted at the investment market, with one-bedroom apartments expected to make up 53 per cent of new stock and two-bedroom units earmarked to make up 43 per cent of stock.

Mr Roubicek said it was expected sales levels would continue to remain stable, or even increase over the course of 2013.

“Typically we have seen robust sales volumes with the release of new projects, particularly boutique developments, and with 63 per cent of mooted projects in the short term expected to yield less than 100 apartments, there is the potential for a slight increase in sales activity,” he said.

“Furthermore, indicator lending rates for standard variable mortgages are now at their lowest levels since December 2009, and discounted and fixed rates are at around 20-year lows, in the five to 5.5 per cent range. This has resulted in an improved lending environment for purchasers and, should rates continue to decline, confidence may experience some uplift.”

He said 85 per cent of new apartment buyers are investors.

“Investors are attracted to new apartment stock because it has the potential to achieve high gross rental yields of over seven per cent in some cases, as a result of low vacancy and moderate rental growth,” he said.

“The best returns can be found in one and two-bedroom apartments, and particularly in one-bedroom apartments, because they are at a lower price point.

“With interest rates falling and tax depreciation for new properties coming into play, these properties can actually quite often be cash flow neutral or positive, which is a huge drawcard for investors.”

Colliers optimistic about Brisbane apartments
lawyersweekly logo
promoted content
Recommended by Spike Native Network
Listen to other installment of the Real Estate Business Podcast
reb top 100 agents 2017

The REB Top 100 Agents ranking is the foremost ranking of agents in Australia. It has set the bar for excellence in Australian real estate. To be ranked as an REB Top 100 Agent is the standard real estate professionals strive for. See the full 2018 ranking here!

featured podcast

featured podcast
The difference between an average agent and one who dominates

McGrath Crows Nest’s Peter Chauncy is number 10 in this year’s REB Top 100 Agents ranking. Peter, however, is more likely not surprised ...

View all podcasts

Would you consider working for Purplebricks or a similar 'DIY' model?

Yes (7.2%)
No (80.9%)
Perhaps - make me an offer (12%)

Total votes: 209
The voting for this poll has ended on: July 13, 2018
Do you have an industry update?