City Beat October 2023: Brisbane property market reaches record highs as off the plan demand continues
Brisbane has become the first of the eastern capital cities to erase to losses in the property market in 2022, CoreLogic's latest Home Value Index found.
Dwelling values in the Queensland capital have gone so well over 2023 that they've rubbed out the -8.9 per cent decline to reach a new record high.
Both the house and unit market have contributed significantly. Houses are 10.3 per cent up year to date, units 9.8 per cent.
Units, which incorporates both apartments and townhouses, posted another 1.3 per cent gain over October to be the best performing capital city unit market alongside Perth, although bested by their Gold Coast neighbours whose unit market posted 1.6 per cent growth.
Read more: City Beat October 2023: Southern boom continues in Gold Coast off the plan apartment market
The rolling quarterly average of Brisbane units is now up 3.5 per cent, taking it to a new median high $545,000. It is now on track to overtake Canberra and become Australia's third priciest capital unit market, behind Sydney and Melbourne. Canberra's median unit value is $589,000.
What's happening in Brisbane's off the plan apartment market?
The chronic undersupply in Brisbane was alleviated somewhat by two new projects hitting the market in October.
National developer Kokoda Property, who submitted plans for their $1.5 billion Tenneriffe masterplan last month, has just launched Ruby Ruby, their second apartment development in Milton.
The 145-apartment project on Crombie Street has already seen huge success, selling down around 90 apartments in the space of a few months before its public launch.
Spanning 21-levels and designed by Cottee Parker, Ruby Ruby features a suite of wellness amenity, the majority of it on the rooftop. It will feature an wet-edge swimming pool with several cabanas and day beds and a heath and wellness space with a gym, infrared sauna, spa, plunge pool and a yoga studio.
360 Property Group's Jeremy Gilmore is marketing Ruby Ruby. Gilmore says due to the lack of supply, for those that can get to market are getting good prices.
"The good developers are really shining through at the moment," Gilmore says. "They're favourable for the banks, builders and buyers, who all want to see a long track record to invest their money into the project."
A true test of the appetite for off the plan apartments is when both ends of the market are firing, which is certainly the case in Brisbane.
YPM Group have seen a similar demand and uptake at their recently launched Sorano House, just seven full floor apartments on Kangaroo Point's dress circle Hamilton street.
YPM has already sold over half of the apartments to downsizers from both Brisbane and the Sunshine Coast.
YPM Group Projects Director Phillip Rand says the successful start to the campaign has been underpinned by the decision to start construction before launching to market.
"Buyers at this end of the market want to have full confidence in the delivery of the project before they commit, and the biggest confidence driver in the current climate is construction certainty," Rand says.
"Our Sorano House buyers have been drawn to both the rarity and exceedingly high quality of the project as well as the development around it. The Kangaroo Point Green bridge is less than 100m away, connecting you with Brisbane's City and the new Waterfront Brisbane by foot, plus just 500m from the site Queen's Wharf will bring 50 new restaurants and cafes within walking distance."
Rand says the rarity of projects like Sorano House means demand is always likely to outstrip supply.
"It can take years for developers to source and amalgamate true luxury sites, either fronting the river or with incredible never to be built out views, so buyers in this end of the market recognise how rare an opportunity like this is when an exclusive project like Sorano House comes to market. "
McGrath's Head of Projects QLD, Jo Prince-Gillies, says the landscape of new luxury apartments and terrace homes is undergoing a remarkable transformation, driven by a scarcity of supply.
"This scarcity has shifted buyer preferences, placing a premium on quality, prime locations," Gillies says.
"The higher end projects we take on have resonated with the discerning affluent downsizer and empty nester market, mirroring a growing desire for sophisticated living experiences."
Gillies says their buyers, now more discerning as ever, are seeking certainty before they commit.
"We recognize the importance of providing reassurance, and we're diligently working towards confirming builders and construction timelines to instil confidence in our clients."
On interest rates, Gillies says that while the fluctuations have impacted the broader property market, our niche segment has exhibited resilience, particularly among buyers with budgets exceeding $2.5 million.
"Projects less than $1 million is where we have had to be a little creative to get buyers across the line due to finance and rising interest rates."