City Beat May 2023: Brisbane unit markets continue growth trajectory as supply tightens
Brisbane's unit market continues to go from strength to strength.
There was hardly any downturn felt in the Queensland capital, with lack of supply and continued migration keeping prices firm while its eastern seaboard counterparts suffered near double digit losses over the last year.
Brisbane has actually seen 1.5 per cent growth over the last 12 months, according to CoreLogic. Unit values grew 0.9 per cent across April, the second best performing capital behind Sydney.
The median value of units in Brisbane is now approaching $500,000.
Colliers Director Andrew Scriven, who is handling sales at Consolidated Properties recently launched Monarch Residences in Toowong, says that in an environment of relative uncertainty, enquiry for off the plan apartment projects in Brisbane remains healthy.
"By far the largest group is local owner occupiers who account for approximately 70 per cent of enquiry," Scriven said.
"This cohort consists of downsizers, rightsizers and to a lesser extent first home buyers all being attracted to different products types and locations."
Scriven added that affordability remained an issue for a large portion of the market, with less and less stock available in the sub $700,000 range, however there are good options available for those with larger budgets.
There's also been enquiry grow from investors, who are looking to capitalise on growing yields due to sub one per cent vacancy rates in the inner city.
Developer Dibcorp has timed their Bide, Newstead apartment tower perfectly. They're able to point to an under construction project, which Keenan & Co.'s Fraser Bryne says is now top of the list of questions to ask when enquiring.
"Their first question is 'is the project under construction, and if not, why?'" Byrne says.
"The second question is 'who is the development team and what have they delivered before?'".
Byrne says these are completely understandable requests in the current climate.
"Buyers have access to a vast amount of information nowadays and are often well educated in buying off the plan, so they want full confidence in the project.
"I think these are completely understandable requests and in fact encourage buyers to ask these questions in their search for the right property because if they can be answered with confidence, they should feel comfortable proceeding."
The Longland Street project has benefitted from the tight supply in Brisbane's inner-city, which Bryne says is driving strong buyer demand.
The last residences at Bide have just been released to the market, a collection of two and three-bedroom skyhomes.
Richard Lawrence, Founder and Managing Director at Position Property, says there's a strong imbalance between supply and demand, which isn't likely to change in the immediate future.
"We are heading into new territory in the Brisbane market with the extreme tightening of supply of new product due to more challenging construction costs," Lawrence says.
"Simultaneously, we are seeing high demand.
"Queensland’s population is growing overwhelmingly faster than every other state, with 2,201 people moving to the state each week on average in the past year.
"The majority of this growth split between interstate and international migration, as opposed to natural increase.
"Fundamentally, demand is overwhelmingly outstripping not only current supply, but the short term pipeline of supply.
"Along with this, rental vacancies are at historic lows with yields consistently exceeding the southern states, making the timing perfect for investors to enter the market.