Wednesday, April 1, 2015

No oversupply in Inner Brisbane for Apartments?

"Brisbane's inner-city apartment market is a long way from being oversupplied, according to leading real estate adviser Urbis.
Issuing its detailed inner-city report on Wednesday, the group reported that a record 1500 sales had been made in the December quarter from 111 apartment projects. The September quarter recorded 1400 and such numbers have not been seen since 2007.
Urbis economic and market research director Mal Aikman said future supply was "not an issue" and that investors from Sydney and Melbourne were seeing value in Brisbane.
"Looking forward what we find is that in the first and second quarters of 2015 there are about 5000 apartments available for sale," Mr Aikman said.  "At the current rate of demand, that would equate to a sales rate of about 4000 apartments. So demand is slightly behind, but not significantly, and we're a long way from saying there's an oversupply or a glut."
Urbis noted that the Brisbane central business district had a huge surge in sales almost entirely driven by AMP Capital and Billbergia's Skytower, which saw 415 sales worth $267 million."
In my opinion, Urbis is overly optimistic.  There may be buyers for off the plan apartments, but will there be enough renters?  I suspect that most buyers in Brisbane Skytower are from China.

The Brisbane Times provides this gloss:

He admitted prices for new apartments were highly unlikely to rise in the coming year due to the increased supply and stopped short of guaranteeing they would fall.  However, he indicated tumbling price tags to live in the inner-city were probable.  "Our view is prices aren't likely to rise but whether they will fall really depends on the developers," he said.

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