LUXURY APARTMENT BUYERS POCKET $200,000 GAIN IN A YEAR

LUXURY APARTMENT BUYERS POCKET $200,000 GAIN IN A YEAR
THE trade in luxury apartments has strengthened in Brisbane over the past year with average capital gains of about 14 per cent for properties worth $1 million or more, according to Colliers International.

This is despite the latest data showing a broader slowdown in the inner-city apartment market which has led to some projects being mothballed or sites being sold.

The property agency says while the number of sales is low, the price gains for luxury apartments averaged $207,241 in the last 12 months.

Colliers has counted 29 sales at an average price of $1.515 million and an average capital gain of $207,241 during the period.

Lily O'Connell, Colliers' residential project manager (pictured), says the capital growth could be a reflection of a tight market in luxury apartments in Brisbane's CBD.

"It does indicate that there are not many options in the CBD that suit purchasers with a budget of over $1 million, creating competition in a limited market place," she says.

"As reported by Urbis, there were only four new developments within the CBD over the June quarter, with only two additional projects expected to enter the market in the next six months."

Among them is Mary Lane which is attracting strong interest from owner-occupiers.

Brisbane-based developer Sunland Group (ASX:SDG) was among the early players in the luxury market in the current property cycle with the $240 million Abian project, which sold out well ahead of construction starting late last year.

"Early re-sales at Abian are already achieving significant growth, eight months ahead of the project's completion," says O'Connell.

The latest data from market researcher Urbis has recorded a drop in the pace of Brisbane inner-city apartment sales over the June quarter.

"This has been on the back of political and regulatory distractions," says Paul Riga, associate director at Urbis.

"However, the outcome is that supply of new developments coming to the market; the future pipeline of apartment product, has started to self-regulate.

"Primary factors driving the slowing supply of product are increasing construction costs, high development site acquisition costs, a competitive pricing market, and added costs required to give developments a point of difference.

"These factors have culminated with tightening developer finance across the inner Brisbane residential market.

"The positive from this slowdown in future supply is that it will allow product under construction to absorb into the rental market without an ongoing flow of high levels of new apartment supply.

"The vacancy rate was at 0.6 per cent in March quarter 2016, with over 2350 new and near-new apartments being surveyed across the inner Brisbane.

"This indicates a significantly tighter rental market when compared to the total inner Brisbane rental market, which recorded a 3.3 per cent vacancy rate for houses and units," says Riga, quoting statistics from the Real Estate Institute of Queensland.

Softer market conditions have caused some developers to reassess existing projects. The most recent site being put up for sale is Heeton Holdings' joint venture at 188 Wickham Street in Fortitude Valley. The site is expected to fetch up to $20 million.


Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support

How communications technology can raise the bar on customer service, employee experience
Partner Content
From capturing feedback early to providing messages with a higher rate of cut-through, ...
Advertisement

Related Stories

Apollo to divest large share of motorhome fleet to get Tourism Holdings merger over the line

Apollo to divest large share of motorhome fleet to get Tourism Holdings merger over the line

In an effort to appease Australian and New Zealand regulator concer...

Dexus awards John Holland building contract in $2.1b Waterfront Brisbane project

Dexus awards John Holland building contract in $2.1b Waterfront Brisbane project

After securing an $830 million contract from Dexus (ASX: DXS), Melb...

QLD to launch Star Entertainment review in July as former judge appointed to probe casino operator

QLD to launch Star Entertainment review in July as former judge appointed to probe casino operator

Casino operations that account for more than half of The Star Enter...

Commercial tower at Sydney’s Green Square receives development approval

Commercial tower at Sydney’s Green Square receives development approval

A commercial tower designed with the changing nature of work in min...