Saturday, October 13, 2012

Smaller May Have Big Future

The headline in a story today in the Courier Mail property advertorial section:  "Smaller may have big future".  Some points made in this article:
  • Buyer demand for new apartments in Brisbane is for smaller apartments
  • Owner-occupiers prefer larger apartments
  • But in the current market, most of the new apartment buyers are investors (about 85% of buyers) and investors are very price sensitive at present.
  • "With no desire to live in the property they are buying, they are purely looking at the return, and the best returns can currently be found in one-bedroom apartments."
  • In the current market, one bedroom apartments range from 45 sqm to 52 sqm and are priced from $345,000 to $425,000.
  • "The ideal mix [for a new development] is 70% one bedroom apartments and 30% two bedroom apartment."
My strategy is never to buy an apartment that I would not live in myself.  I would not live in an apartment that was less than 70 sqm.  When owner occupiers decide to buy, there will be a shortage of larger two bedroom and three bedroom apartments in Brisbane.

In another article today, Matusik says that Brisbane's CBD has 24% few apartments on the market compared with this time last year.

No comments: