BRISBANE Apartment Report
BRISBANE Apartment Report
BRISBANE Apartment Report
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Inner East Precinct<br />
Supply Constrained<br />
New <strong>Apartment</strong> Market<br />
The June 2009 quarter saw 18 registered<br />
unconditional sales in the Inner East precinct<br />
at a weighted average price of $921,667. This<br />
is the highest weighted average price recorded<br />
of any inner city precinct by over $300,000,<br />
and as can be expected in a price sensitive<br />
and volatile marketplace, the sales rates are<br />
reflective of this, falling considerably from the<br />
44 unconditional sales registered in the March<br />
quarter prior.<br />
Of the stock which transacted during the<br />
quarter, the majority of transactions occurred<br />
within two bedroom variations, recording 56%<br />
of the total sales. Three bedroom apartments<br />
recorded 34% of the 18 transactions whilst<br />
the remaining 10% of sales were in one<br />
bedroom configurations. Whilst it could be<br />
argued that these sales are a result of the<br />
product type which is currently offered to the<br />
market, it should also be recognised that the<br />
Inner East has been a region with limited new<br />
supply in recent years which has restricted<br />
unconditional sales registered.<br />
Yungaba and Aqua’ta again outperformed all<br />
other projects within Brisbane’s Inner East<br />
recording seven unconditional sales a piece<br />
during the three month period to June 2009.<br />
Yungaba at a weighted average figure of over<br />
$1.1 million and Aqua’ta at approximately<br />
$670,000. Quartz again recorded a consistent<br />
four unconditional transactions.<br />
The Inner East therefore closes the 2010<br />
financial year with 123 apartments available<br />
for sale over six different projects. Of the<br />
stock which remains for sale in the Inner East<br />
precinct, there is an overwhelming majority of<br />
two and three bedroom apartments. A total<br />
of 52% of the stock available for sale exists as<br />
two bedroom off-plan apartments whilst three<br />
bedroom variations total a further 41% of the<br />
remaining stock. One bedroom apartments<br />
total only 6% of the apartments available<br />
for sale suggesting there may be a demand<br />
for this product mix. With the focus on high<br />
end, $1 million plus residential in the region<br />
currently, the projects being actively marketed<br />
can expect a slower than average rate of sale<br />
given the $1 million plus market was a very<br />
small proportion of the total settled sales<br />
registered for the quarter, less than 5%.<br />
A considerable challenge continues to occur<br />
for new apartment product available for<br />
sale within Brisbane’s Inner East precinct. A<br />
significant price differential continues to exist<br />
between the new apartment transactions,<br />
a weighted average price of $921,667,<br />
and the resold stock which recognised an<br />
average price of $504,198. This equates to an<br />
enormous differential of 83% between the<br />
two figures and is a telling example of why<br />
minimal new apartment sales are occurring<br />
when compared to the existing market.<br />
Competition for buyers is, and will continue<br />
to be, a prevalent issue for new apartment<br />
configurations within the Inner East precinct.<br />
The greatest competition being the existing<br />
apartment market. Into the future, a lack<br />
of stock and limited future stock given land<br />
constraints in the region, may provide the<br />
motivation instigating the capital growth<br />
required to force resale apartment values<br />
closer to the new apartment product<br />
currently available for sale within the<br />
marketplace. The new apartment stock<br />
delivered to the market must ensure that the<br />
end user is front of mind and competes on<br />
a level which appeals to the target market,<br />
whether it is owner occupier or investor<br />
stock. The project cannot be all things to all<br />
markets; however effective design will allow<br />
different aspects of the building to appeal<br />
to varying markets. Currently, price is the<br />
underlying factor adding or detracting from<br />
the consumer’s motivation to purchase. Value<br />
propositions in development must be strong<br />
and encompass different elements including<br />
location, lifestyle, amenity, infrastructure,<br />
design and view corridors in order to appeal<br />
to a competitive market surrounding the<br />
individual purchaser<br />
General <strong>Apartment</strong> Market<br />
• The median price for an apartment within<br />
the Inner East precinct during the three<br />
month period to March 2010 was $435,000<br />
a softening of 2% from the December<br />
period prior and a figure 11.8% above the<br />
same period in 2009. The Inner East was<br />
the only region to recognise double digit<br />
growth over the past twelve months.<br />
• In terms of price point activity derived<br />
from the settled sale price of the Inner East<br />
apartment market, activity continues to be<br />
heavily weighted toward the sub $500,000<br />
price point with 68% of the quarter’s sales<br />
falling below this point.<br />
• Brisbane’s Inner East has seen a<br />
strengthening in the settled sales activity<br />
registered during the three month period<br />
to March 2010. A total of 189 settled<br />
sales were recorded during the most<br />
recent quarter, a figure 22% above the<br />
quarter previously.<br />
• A resale analysis was undertaken by Colliers<br />
International Research in order to establish<br />
returns achieved by those who exited the<br />
Inner East property market during the<br />
March 2010 quarter. An average annual<br />
capital growth figure of 7.5% was realised.<br />
Properties were held on average for 7 years<br />
before being resold.<br />
• Demand for tenancies within Brisbane’s<br />
Inner East has seen stable rental returns<br />
through recent months. According to<br />
the RTA, median weekly rents for a one<br />
bedroom apartment in the Inner East are<br />
$310 per week whilst a two bedroom<br />
apartment saw a median weekly rent of<br />
$430 per week.<br />
• Current market rates suggest that rental<br />
tenancies are seeking much higher weekly<br />
returns than the median suggested by the<br />
RTA. A two bedroom apartment in Silver<br />
Quays is asking for a tenant at $700 per<br />
week whilst a three bedroom apartment in<br />
One Holman Street is seeking a tenant at<br />
$1,000 per week for a long term tenant.<br />
Planned <strong>Apartment</strong> Market<br />
• A number of sites remain for sale in the<br />
precinct and are seeking a developer who is<br />
able to undertake the proposed projects.<br />
• The Inner East remains as one precinct<br />
which will look continue to be<br />
undersupplied into the long term.<br />
BRIEFLY...<br />
➤ 18 new unconditional<br />
sales were registered<br />
during the June<br />
2010 quarter<br />
New <strong>Apartment</strong> Sales<br />
New Projects Pending<br />
General Market <strong>Apartment</strong> Sales<br />
Prepared by Colliers International Research Source: RPData<br />
➤ The weighted average<br />
price of a new<br />
apartment for the<br />
quarter was $921,667<br />
Project Status Likely No of Apts<br />
Seven Hills Tafe Redevelopment Development Application 250<br />
53-61 Kitchener St Development Approval/Deferred 28 (1,2,3 Beds)<br />
@20 Development Application 192 (1,2,3 Beds)<br />
Dockside Garden Towers Development Application 102 (1,2,3,4 Beds)<br />
Life Options Project Development Approved/Deferred 32 (1,2 Beds)<br />
Shafston International College Development Application 142 (2,3 Beds)<br />
498 Wynnum Road Development Application 72<br />
125 Bulimba St Bulimba Development Approval 34 (1,2,3 Beds)<br />
Community Care Centre - Coorparoo Development Approval 20 (1 beds)<br />
Prepared by Colliers International Research Source: BCI Australia, BCC<br />
Sale Price Range Mar-09 Jun-09 Sep-09 Dec-09 Mar-10<br />
Less than $300,000 26 18 23 7 18<br />
$300,000 to $399,999 73 85 76 48 54<br />
$400,000 to $499,999 47 33 51 39 57<br />
$500,000 to $599,999 15 18 26 27 29<br />
$600,000 to $699,999 2 13 13 12 12<br />
$700,000 to $799,999 3 4 2 3 3<br />
$800,000 to $899,999 2 4 2 9 4<br />
At least $900,000 13 8 17 10 12<br />
Grand Total 181 183 210 155 186<br />
➤123 units remain<br />
available for sale<br />
within Brisbane’s<br />
Inner East precinct<br />
Name Suburb Status<br />
Castlebar Cove Kangaroo Point Completed 38 34 0 4<br />
Forty Park Avenue Kangaroo Point Completed 5 4 0 1<br />
Scott Street Kangaroo Point Under Construction 11 5 0 6<br />
Quartz <strong>Apartment</strong>s Bulimba Under Construction 52 40 4 12<br />
Yungaba Promontory Kangaroo Point Awaiting Construction 68 31 7 37<br />
Aqua’ta Bulimba Under Construction 81 18 7 63<br />
Summary - 6 projects 255 132 18 123<br />
Prepared by Colliers International Research Source: Colliers Brisbane Unit Survey<br />
Total<br />
Units<br />
Examples of Current <strong>Apartment</strong> Rents<br />
Project Beds Bath Car Furnished Rent $ Pw<br />
Lana Place 1 1 1 Yes $310<br />
1 Holman Street 1 1 1 No $410<br />
The Docks on Goodwin 1 1 1 No $420<br />
Vicinity 2 2 1 No $420<br />
The Docks on Goodwin 2 2 1 Yes $630<br />
Stradbroke Tower 2 2 1 Yes $700<br />
30 Silver Quays 2 2 2 Yes $700<br />
Shaftson Towers 3 2 1 Yes $750<br />
1 Holman Street 3 2 2 No $1000<br />
Prepared by Colliers International Research Source: SEQ Rents<br />
➤ The general apartment<br />
market registered a median<br />
price of $435,000<br />
Sold to<br />
Date<br />
Sold<br />
June<br />
QTR<br />
Available<br />
for Sale<br />
12 Brisbane <strong>Apartment</strong> <strong>Report</strong> June Quarter 2010 13