Owner occupiers accounted for 51% of apartment purchases lastest quarter

Governments have seeded many key infrastructure projects throughout Australia, and the growing list of transport projects is painting a positive picture for the nation’s ability to absorb population growth, according to Urbis' latest report.

Across the national apartment market, Urbis found that 7% of available stock surveyed sold in the first quarter of 2019, continuing the downward trend from 2018.

Urbis Group Director, Clinton Ostwald, said “It is likely that we will see the floor of the sales valley in 2019 with a potential increase in sales activity in 2020.

“The nation is investing heavily in transport infrastructure to improve amenity in our cities, which will help support demand along corridors such as Sydney’s North West Metro and Eastern Suburbs Light Rail.”

While buyers await delivery of new infrastructure, Sydney recorded the lowest sales rate with only 4% of available stock surveyed selling during the quarter. Melbourne and Brisbane both recorded a sales rate of 7% down on rates seen in the past 12 months. The Gold Coast outperformed the major cities recording 230 sales, equating to 9% of available stock.

Stock

Urbis research shows approvals numbers decreasing each quarter over the past 12 months. The number of developments achieving minimum presale levels has also declined, resulting in a large pipeline of approved projects they feel are unlikely to move to construction in the near future.

They believe that given ongoing population growth from natural increase and migration, we are likely to see a shortage of new housing emerge over the next 12 to 18 months.

Melbourne’s Westgate Tunnel will uplift the Inner West and Western Corridor with approximately 7,500 apartments approved in these precincts.

Brisbane’s Cross River Rail in the Inner South will see a similar pattern where there are over 8,000 approved apartments.

In the longer term, Urbis expect that areas around West Metro in Sydney, Metronet in Perth and Metro Rail Tunnel in Melbourne will see increased apartment activity.

Buyer Profile

Owner occupiers have continued to be the most active buyers in the Australian apartment market, accounting for 51% of buyers in Q1 2019.

Foreign investors have been pushing sales in Sydney, Perth and the Gold Coast, accounting for over a quarter of buyers, but have dropped in Brisbane.

Interstate investors were interested in the Gold Coast (25%) and Melbourne (11%) whereas Sydney, Brisbane and Perth appealed more to local investors.

URBIS CITY SNAPSHOT

6.7 % of the surveyed available stock was sold in the January quarter across the five markets:

• Sydney (4% of available surveyed stock sold, 485 new apartments launched)
• Melbourne (7% of available surveyed stock sold, 295 new apartments launched)
• Brisbane (8% of available surveyed stock sold, no new apartments launched)
• Perth (6% of available surveyed stock sold, 161 new apartments launched)
• Gold Coast (9% of available surveyed stock sold, 164 new apartments launched)

National weighted average sale price recorded at $726,329 for Q1 2019

• Sydney – $1,091,935
• Melbourne – $621,246
• Brisbane – $638,409
• Perth – $604,212
• Gold Coast – $787,608

The most popular product type was two-bedroom, two-bathroom product at 46% of total sales. Across the cities the highest selling product types were:

• Sydney – Two-bedroom, two-bathroom apartments – 41%
• Melbourne – One-bedroom, one-bathroom apartments – 50%
• Brisbane – Two-bedroom, two-bathroom - 56%
• Perth – Two-bedroom, two-bathroom – 43%
• Gold Coast – Two-bedroom, two-bathroom – 63%