Saturday, July 12, 2008

Colliers March 08 Apartment Report

Colliers has released its March Quarter 2008 Brisbane Apartment Report.
It is available from the Colliers Research page, updated here.
The introduction states:
"The Inner Brisbane unit market started the March 2008 quarter with one of the lowest supplies on record. Less than 500 new apartments were available for sale spread across 24 projects. Only 78 sales were made during the quarter. While this is the lowest figure on record, this is largely due to the very low number of apartments available for sale.
There were no new project releases during the quarter. Apartment prices continue to increase, showing demand is still present. Buyers seem to be holding off, waiting for something new to inspire a return to previous sales levels. And they don’t have long to wait, with a number of large, innovative projects currently in planning for the Inner Brisbane area. Meanwhile, the average cost of a new apartment continues to rise, showing demand is still strong for high quality inner city dwellings. New apartments selling in the March 08 quarter achieved an average sale price of $894,000, an impressive 23% higher than the December 07 quarter. Part of this can be attributed to the fact that most existing projects have seen the highly popular low-cost apartments sold in previous quarters, leaving the mid to high end apartments in the market. General market apartment sales were very buoyant during 2007. The inner city residential market now numbers around 48,000 apartments of different sizes, types and ages. There were 4,883 apartment sales in Inner Brisbane in 2007. Some 3,485 of these apartments were priced under $500,000 (71.3% of all sales), and 244 were over $1 million. There are 34 new projects pending which could possibly equate to over 6,000 apartments."
The Australian Financial Review had an article on Wednesday this week, titled: "Low Supply Powers Brisbane Prices."
The revamped Colliers Report focuses on new projects. So take care with the $894,000 figure and "low supply" reports, as this only relates to new stock. The medium price of "second hand" apartments is lower, and there are plenty of apartments for sale.
For new stock, what is left for sale is mostly apartments that are overpriced or the worst apartments in the building. So this is not selling. People are waiting for new releases, and there are a number of projects in presales - Trilogy Towers, Empire Square and Waters Edge for example. This is what people are buying, not the left overs.
Good apartments that are not too small, in good buildings, with never to be built out views, are selling at good prices for vendors. Apartments in buildings of more than 200 apartments or that are managed by Oaks are struggling.

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