New apartment market starts 2012 with a bang
May 23, 2012
Brisbane’s new apartment market started with a bang this year, with the first quarter recording the highest number of sales in nine years.
Andrew Roubicek, Colliers International Residential Director, said you would have to go back to 2003 to find a March quarter that recorded more sales than the 365 across inner Brisbane this year.
“There were 365 unconditional sales over the first quarter totalling around $208 million across 47 surveyed projects,” he said.
“Traditionally activity is slightly subdued in the first part of the year, but this year was different – it was robust, following on from a strong fourth quarter in 2011.
“Confidence would have played a big part in the increase in activity – the economic outlook for Queensland is positive and there were consecutive interest rate reductions in November and December.
“On top of this the Queensland Building Boost Grant of $10,000 would have encouraged buyers to get in to the market and buy a new property.”
Mr Roubicek said looking forward, the outlook for the apartment market was generally positive, with the underlying fundamentals remaining strong.
“One of the other big pluses is the reduction in the number of available apartments across inner Brisbane,” he said. “Over the first quarter this figure declined by a significant 12 per cent to 2250 from 2551 from the last quarter of 2011.
“The recent interest rate reduction of 50 basis points will improve confidence even further, so demand is unlikely to fall – in fact, it is likely to rise – and with a reduction in supply, this means only good things for prices.
“Demand will especially continue for new apartments that are affordably priced, particularly those under $650,000.”
Mr Roubicek said appetite for new boutique developments was evident over the past six months, with several new projects close to selling out within the first three to six months of being released.
“The Green at Showground Hill in the inner north’s Bowen Hills, and Fish Lane and Vine on Russell in the inner south all achieved greater than 70 per cent of total sales in their initial two quarters of release,” he said.
“Vine on Russell experienced the most demand in the first quarter of this year, selling all but three apartments in the project.”
Alex Beer, Colliers International Research Analyst, said new apartment market performed particularly well in Brisbane’s inner south.
“After a strong result in the final quarter of 2011, transaction volumes continued to increase in the first quarter of 2012 with 90 unconditional sales across eight projects, the largest quantity since December 2007,” he said.
“The inner north is still one of the strongest markets though. Although sales volumes softened to 162 in the first quarter this year, they came off a very strong base set in the final quarter of 2011 which saw 247 unconditional sales, the highest number since the peak of the inner north market in the third quarter of 2010.”
Mr Beer said apart from the inner north, the inner west was the only market that saw a decline in sales activity, and it was only very slight.
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