Locals snap up apartments in The Fernery, but Brisbane needs investors to grow: Five minutes with Colliers director Andrew Scriven
Brisbane is seeing continued growth in its apartment market, but Colliers Director of Residential Andrew Scriven says there's not been the same strength in the capital yet compared to the booming Gold Coast market just an hour south.
"It's a more solid market in Brisbane at the moment, with good sales to owner-occupiers," Scriven says, and suggests for Brisbane to grow, they need investors to come back.
"There's a bigger pool of people throughout the rest of Australia," Scriven said, highlighting the four million residents in SEQ and 21 million or so across the rest of the country. That investor pool is ultimately the most important".
Interstate investors are starting to come back in to the market, but only slowly, Scriven says.
"The yields in Brisbane are still the highest out of all three states [Sydney, Melbourne and Brisbane], with some of the lowest vacancy rates in the country. Prices are half that of Sydney, and 30 per cent less than Melbourne."
Scriven noted that there's been a high price differential over the last year between established and off the plan apartments, which is offering further opportunity for value.
"Over the last 12 months, the established apartment median has risen may be 10 per cent," Scriven says.
"New apartments haven’t risen at all over that time. There's a bit of a price differential which is starting to look like an opportunity for investors."
With limited action from interstate investors, sales have picked up to owner-occupiers, no more evident than at The Fernery, the mixed-use project in Ferny Grove in Brisbane's north.
"There's been overwhelming success since launch in April from the local market, looking to either downsize, invest or secure something for the children. Most of them have come from a couple of kilometre radius."
"Locals have really embraced the project. They haven’t really had that offering ever."
The bureau^proberts-designed project, developed by the Townsville-based Honeycombes in partnership with their financier MaxCap, will comprise the 82 apartment block The Fernery, as well as a 12,000 sqm retail centre set next to the Ferny Grove train station.
Prices start from $352,500 for the one bedroom apartments, $399,000 for the two bed units and $620,000 for the three bedrooms.
Scriven says the mixed-use retail precincts is what buyers want in this day and age.
"They've got the butcher, the baker, the candlestick maker, all at their doorstep," Scriven says.
"It's away from that investment grade apartment development to more quality schemes. Good architecture and good place to live that will increase in value."
On the level of finishes and designs of the apartment development, Scriven suggests what The Fernery is offering is what you would typically find in the more premium apartment market areas such as Newstead and New Farm.
Construction is due to commence of the residential and retail components in the coming months, with Broad Construction appointed to handle the build. Completion is slated for late 2023.
Scriven suggests that construction dates, completion dates and builder appointments are what people want to hear when it comes to buying off the plan developments, particularly mixed-use precincts.
"They want to know timelines and when they are being delivered."
There's been a bit of expat interest across Brisbane, but that's primarily been focused on the housing market.
"What we have seen is expats have come back, particularly Australian citizens in Sydney and Melbourne. There's been around 440,000 Australian's come back from overseas over the 12 moths to Feb or March. All those people are living someone, or they've bought.
"A lot of expats have a lot of wealth and have been leaning towards the housing market in SEQ which has been well documented".
There was a bit of expat interest in the boutique St Lucia riverfront, 160 Macquarie Street.
Now over 70 per cent sold, 160 Macquarie is St Lucia's first riverfront apartment development in more than a decade.
The development by QM Properties, led by horse enthusiast and managing director Jon Haseler, has been designed by the architecture firm Rothelowman and only homes 34 riverfront apartments.
Scriven suggested that as a city and potential place of residence, Brisbane has come out of the COVID pandemic as well as any other capital.
"If you don't need to be in the office, there's worse places you can be than Brisbane," Scriven says.
"We didn't have a lock down as long as anyone else and that has certainly been an attraction to the city. People can work a little bit longer from home, a bit more mobile. There's regionalisation or mobility in the work force."