Extracts from the SMH. (Full article) March 4, 2008
"The coast may be fashionable but Brisbane remains the most popular location for interstate migrants, attracting the largest proportion of Sydneysiders ready to call Queensland home.
The growth in employment has affected housing supplies, says senior BIS Shrapnel economist Jason Anderson.
"There has been a huge amount of employment growth in south-east Queensland, particularly in office markets," Anderson says. "Vacancy rates in Brisbane are negligible and there has been a lot of office construction. Sites once mooted for residential use are snapped up for offices."
As a result, Anderson says, there is little new apartment construction happening and supply is very constrained.
"Office construction is going to draw a lot of people into the CBD for work, and demand for accommodation in inner-ring suburbs is going to increase sharply over the next two years," he says. "There are not going to be enough new apartments for them to occupy."
He says this situation means the outlook for inner-Brisbane apartments is positive. He also predicts a perception shift in the value of apartments in the middle and outer suburbs.
"We'll see more construction and acceptance of the value of having new apartments in middle and outer-ring suburbs close to transport infrastructure," he says. "There's not going to be enough rental housing in the inner ring, so demand will spill into the middle ring. This will change people's expectations of returns over the next two to three years."
"The recent stockmarket jitters might see more investors returning to the 'tried and true' property market," Timchur says. "With so many new unit projects about to launch in the Brisbane market, developers will need to keep their fingers on the pulse and make sure they are providing what the market wants.
"Things are going to get competitive this year."
PRICES SOAR FOR NEW UNITS
The average price of a new unit within five kilometres of the Brisbane CBD rose from $597,000 in June last year to $725,417 in December, an increase of 21.5 per cent.
The figures were released by Colliers International Brisbane research analyst, Alison Timchur, who reports there are at least 10 big projects due to hit the Brisbane market this year.
These 10 developments account for more than 2400 units, with a building cost of $2.8 billion. More than 50 per cent are expected to be two-bed units, with a further 35 per cent one-bedders.
Timchur says this highlights how developers have been guided by market activity last year to determine current and emerging living trends, and are planning new developments to cater for the expanding single and couple inner-city market, which has dominated the Brisbane marketplace during the past year.
"One thing we may expect to see in 2008 is the continued escalation of new unit prices, driven by factors such as increased demand, larger living spaces and the increasing popularity of inner-city apartments for owner-occupiers and investors alike," she says.
THE ONLY WAY IS UP
· A PRDnationwide Brisbane unit report shows 2007 was a turnaround year for Brisbane's new apartment market.
· After the slowest year in more than a decade, there was an upswing of activity in new unit sales last year.
· During the year, $732 million of new apartments were bought and sold in inner Brisbane (a total of 1065 units).
· The average price of a new unit in inner Brisbane during last year was $687,000.