- There are a very large number of new apartments being built, which will settle in about two years.
- Interest rates are likely to increase by then.
- Rental vacancies will increase and rents will decrease as these new apartments come on to the market.
- Banks will make it hard to get a loan. My guess is that they will only fund 70% of the valuation.
- The valuations are likely to be less than contract price.
- Many people will be unable to settle.
- Prices will therefore decrease, at least from the prices that new off-the-plan apartments are currently being sold for.
- Second tier second hand apartments will be impacted as a result. Why buy a old apartment in Charlotte Towers or Festival Towers, that have few redeeming features, when you can buy a similar sized apartment with a similar view in a new building for a similar price?
- Apartments in some locations, and in some buildings (e.g., direct riverfront, larger apartments), will suffer less negative impact.
Sunday, October 26, 2014
What does the future hold for Brisbane apartments?
My advice to those considering buying in a high-rise apartment block in Brisbane -- don't buy off the plan and don't buy for two years. Why -- prices are likely to fall. My reasoning: