The return of local buyers to Brisbane’s apartment market is behind this year’s upswing in new apartment sales, according to new data from Colliers International. Colliers International is forecasting 2,500 apartment sales in Brisbane for 2014, up 10% from last year.
Director of residential at Colliers International Andrew Roubicek says that local buyers are acknowledging current the affordability of apartments in Brisbane, while the low vacancy rates and attractive yields on offer in the city are attracting interstate investors.
“Local investors are well and truly back in the Brisbane market with December and January, historically a quiet period for this group, recording very strong sales results,” said Roubicek.
“Locals want to take advantage of the market now as it represents very good value compared to Sydney and Melbourne.
“With more buyers in the inner Brisbane market than has been experienced for some time, the pent up demand is putting pressure on available stock, particularly in the CBD, which currently has the biggest supply shortage,” he said.
As a result, Colliers International is expecting that apartment prices will rise by about 7% across the city in the coming year, while vacancy rates are likely to stay around 1%.
According to Roubicek, after investors, local owner occupiers were the second most active group in the city’s apartment market, many of whom are first home buyers or couples who were downsizing. He also pointed out that Toowoong, Cannon Hill and the Brisbane CBD were all hotspots for buyers, saying that Toowong was “one of Brisbane’s most tightly held suburbs”, due to its close proximity to the CBD and access to major infrastructure, along with Toowong Village retail precinct, which is soon to undergo a $50 million refurbishment.
“The University of Queensland is also a major driver for investment in Toowong,” Roubicek said. “The number of students at the St Lucia campus is now in the order of 33,000, of which 9,200 (28%) are full fee paying international students, a potential target market for apartment developers.
“There are very limited development sites in Toowong with an exception of the 1.5ha former ABC site purchased by Sunland Group in September 2013 with plans for an apartment development.”
Roubicek said that Colliers International was anticipating a strong year, currently marketing six projects with a combined value of about $800 million, with another five projects launching in the next six months.