Wednesday, September 19, 2012

Brisbane Apartments Prices to Fall

"The Brisbane inner-city apartment market is heading into a downswing due to the large numbers of off-the-plan projects currently being marketed in the Brisbane CBD and surrounding suburbs, according to property investment adviser Michael Yardney.

Yardney, the director of Metropole Property Investment Strategists, places the Brisbane unit market at two o'clock on the property clock – 12 o’clock indicates the property market has peaked while 3pm indicates the market is in a downswing.

Yardney expects there to be an oversupply of inner-CBD and near-CBD apartments in Brisbane for the next few years, causing prices to fall slightly.

Most recent data put out by the Real Estate Institute of Queensland has unit and townhouse prices in Brisbane up 3.8% over the June quarter to a median of $402,500 – but down 1.5% year-on-year.

Yardney says many of the Brisbane projects being currently marketed will remain unsold and this oversupply of properties will put downward pressure on prices and rentals.

“Many of the apartments that have been sold off the plan are coming on stream in the next few years and have been purchased by investors.  Some will have difficulty getting finance and settling their purchase. Others will be disappointed to see the end value of their properties is less than their purchase price,” he says.

Yardney assesses the Brisbane detached house market to be between four o’clock and five o’clock – still in a downturn but on the way to bottoming out.

“House prices have dropped for the last two years in Brisbane.  Brisbane buyers are lacking confidence to re-enter the market and are sitting on the sidelines waiting for signs that the market has bottomed before they make a purchase. Many were waiting for the resources boom to reignite their property market, but recent negative media has again dampened confidence,” says Yardney.

According to Yardney there are signs that the inner and middle-ring Brisbane home market is picking up, with more buyers returning and many properties now selling under a multi-offer scenario.

“Brisbane is entering the stabilisation phase of its property cycle, but prices are unlikely to start rising until 2013.”

Full Story on Property Observer

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