BRISBANE APARTMENT PIPELINE SET TO SURGE

Written on the 13 November 2015

BRISBANE APARTMENT PIPELINE SET TO SURGE

BRISBANE'S apartment market will surge to 20,000 properties from 2016 to 2018 - the largest amount the city has seen during a short period of time, according to JLL.

The property firm's Brisbane Apartment Market Indicators Report shows that of the estimated 19,800 apartments under construction or being marketed in inner city precincts, 13,600 are expected to be completed by 2017.

JLL head of residential development valuations Troy Linnane says interstate purchasers are dominating the market, accounting for more than half of sales.

He says foreign purchasers account for 25 per cent and local purchasers 22 per cent of off-the-plan apartment sales.

"The Brisbane apartment market has continued to flourish off the back of strong investor demand, as interstate and foreign investors seek to take advantage of the lower price point and higher yields Brisbane currently has to offer compared to capitals like Melbourne and Sydney," Linnane says.

JLL director of residential research Rupa Ganguli says demand for residential products will remain steady across all inner city precincts.

He says the investor market will moderate over the next 12 to 18 months, with a large number of new apartments entering the rental market during 2016 and 2017.

"Sydney and Melbourne have witnessed an increase in high density living and Brisbane is following suit," Ganguli says.

"For the 2015 financial year, apartments made up over 45 per cent of all approvals to build new private sector dwelling, which was a record high.

"A combination of low interest rates, improving market confidence and relatively affordable price points, particularly for investor buyers, have led to housing prices reaching a historical high in Brisbane.

"In the owner-occupier market, this has provided home-owners with an ideal opportunity to sell their existing dwellings and make a successful transition into a new smaller residence."

The JLL report says the upcoming supply may increase vacancy and a drop in investment yields for generic apartment stock.

"Although gross rental yields have tightened in the Brisbane apartment market, they have remained above Sydney and Melbourne since 2011 and are still quite strong and provide positive cash flow on current lending rates," Ganguli says.

"This can be explained by the large volume of capital available for investment within the property market and the low returns available from other investment options.

"Foreign investors see Australian property as an ideal asset for wealth preservation due to low sovereign risk and secure ownership rights. Brisbane is starting to attract their interest with 16 development sits purchased since 2014."

 


Latest News

CROMWELL CALLS FOR FULL DISCLOSURE FROM INVESTA

CROMWELL Property Group (ASX:CRM) has claimed Investa Office Fund (ASX:IOF) has not disclosed material information ab...

FRAUD CAUSES SILVER CHEF PROFIT SLIDE

EQUIPMENT financier Silver Chef (ASX:SIV) has seen its half-year profit slide due to fraud.

The Brisbane company r...

MEGAPORT QUADRUPLES REVENUE AND INVESTS IN EXPANSION

MEGAPORT (ASX: MP1) increased revenue 345 per cent to $4.46 million in the six months to 31 December 2016, the com...

IN-STORE VETS BOOST GREENCROSS' PROFIT

GREENCROSS Limited (ASX: GXL) shares lifted 5 per cent in trading today after the Brisbane-based company posted a ...

Related News

WHY EMPLOYEE-OWNED COMPANIES ARE BEATING ASX200 SHARE PRICES

EMPLOYEE-owned companies command a higher share price than their publicly listed peers, reaping a 17 per cent prem...

RISE OF THE MACHINES HAS WORKERS SWEATING

UP TO 3.8 million Australian workers are fearful their job may soon be terminated by a robot, a new survey has shown....

LESS TALK, MORE SMALL BUSINESS ACTION IN 2017

THE future growth and prosperity of Australian SMEs could be undermined if governments lose sight of the sector...

TEST DRIVE A POST GRAD AT BOND

THERE'S only one way to really move your career into the fast lane, says Bond University, and 'test driving...

Contact us

Email News Update Sign Up Contact Details
Subscriptions

PO Box 2087
Brisbane QLD 4001

LoginTell a FriendSign Up to Newsletter