Enough demand to prevent Brisbane oversupply

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Despite concerns raised earlier this year that Brisbane could be headed towards an oversupply, there are claims that there is sufficient demand to accommodate the housing stock set to come online in the Queensland capital.

In late October, the Reserve Bank of Australia (RBA) nominated Brisbane, along with Melbourne as being at risk of oversupply, thanks to construction activity in inner-city suburbs.

“While the housing market remains a long way from oversupply nationwide, some geographic areas appear to be reaching that point, particularly the inner-city areas of Melbourne and Brisbane,” the RBA said at the time in a Financial Stability Review.

“Apartment approvals remain at very high levels in these areas, even though these rental markets already look soft; apartment prices have been little changed in the past year, rental vacancy rates are relatively high and growth in rents is subdued.”

But according to Steve Worrad, general manager of Raine & Horne Queensland, demand for apartments from both within and outside Brisbane is still evident.

“It's long been talked about that the stream of apartments coming into the Brisbane market would result in a situation of oversupply, but from what we're seeing, this isn't the case,” Worrad said.

“In fact, the smart money from both local buyers and interstate investors is snapping up quality apartments within a few kilometres of the Brisbane CBD,” he said.

Worrad also said recent figures from the Real Estate Institute of Queensland, which put the vacancy rate for Brisbane’s inner-city apartment market sits at 3.3%, shows there is also sufficient rental demand in the sector.

While the increase in stock means an increase in options for buyers, Raine & Horne selling agent Robyn Thomas said competition for prime dwellings is strong.

“Savvy buyers know quality when they see it, and that's why the best properties are continuing to attract strong interest,” Thomas said. 
 

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Comments
  • Matt Gross says on 02/12/2015 02:48:08 PM

    What an absolute nonsense that reflects the opinion of someone with a vested interest in selling apartments. In August this year there was around 14,000 apartments under construction within 5km's of the Brisbane CBD, another 12,500 with D.A that were sourcing finance and about the same number that were proposed. (Note the above does not include student accommodation which will add another 3,000-5,000 into the mix.) The only glimmer of hope in the apartment market over the next two years are those boutique projects that offer something to the Owner Occupier or very well located sites.

    Interstate migration is at its lowest point for decades, international migration has tapered.

    Vacancy rates have increased and weekly rents have softened.

    The RBA has every reason to be nervous as do the local banks who are very cautious on what they will lend on.

    Please spare me the bollocks that the Brisbane apartment market is not going to be oversupplied. We don't have enough cranes for projects...

    The sooner buyers start to discount the sort of nonsense written above and dig deeper, the sooner they will realise what is a genuine opportunity and what is not. The level of spruiking at this stage of the cycle is no different to that which occurred in Gladstone and Mackay, two centres that are paying the price for greed right now.

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