City Beat August 2023: Brisbane units the best performing market in the country
There's no signs of a slowdown in the Brisbane property market.
While CoreLogic's monthly Hedonic Home Value Index showed a softening in growth across most capital city property markets, Brisbane continued to surge.
Brisbane unit values rose 1.7 per cent over July, the largest increase across both house and unit markets in any capital city. It's the best performing unit market over the quarter, with 3.8 per cent gains well ahead of Perth's 3.3 per cent gains and Sydney's three per cent growth.
Houses in Brisbane also jumped 1.4 per cent in July, the joint-best performing housing market along with Adelaide.
The Brisbane unit median is now $520,000, having been $489,000 at the start of 2023.
What's happening in the Brisbane off the plan apartment market?
There are very few new projects in market in Brisbane still, which is seeing sales continue across pretty much every project.
While listings of house and units in the established space have been rising, they're still trending well below where they were last year and the previous five-year average.
Lloyd Dunn, project director at Sekisui House Australia's West Village, says there are a number of reasons why Brisbane's upswing will continue.
"As developers, we anticipate sustained price growth in the medium to long term due to increasing demand from local purchasers and migrating purchasers, further construction price increase and limited supply of off the plan apartments," Dunn says.
"Long term, we feel that creating a thriving community at the heart of a development will always be essential to selling off the plan apartments. If there is no sense of place or neighbourhood, it can be a harder sell."
Sales have been moving at a fast pace at their West End development for some time. They've transacted $186 million in the last year, with their latest release, The Allere Collection, now 85 per cent sold.
Dunn says they see a continued shift toward larger apartments, incorporating more flexible spaces to accomodate remote work and changing lifestyle needs.
Purchasers are currently seeking out more environmentally friendly developments that provide plenty of green space, sustainability initiatives, and connections to nature that create a biophilic response. Sekisui House Australia integrates the Japanese philosophy of ‘Satoyama’ into their developments and offers spaces to connect people with ‘ribbons of green’.
On the RBA rate hikes impacting buyer sentiment and lending capacity, Dunn says that whilst not all buyers are directly impacted by rate rises, the fact that they need to sell to people who are impacted impacts the value of their original asset.
Luxury home builder turned apartment developer Graya has seen the short supply of luxury apartments help drive sales at their inner-ring Brisbane projects.
Associate Director Shaun Mets says there's been a substantial shift in what buyers are willing to pay, and new precedents are being set.
"Demand is not slowing for quality product in blue chip locations with limited new product set for delivery," Mets says.
Graya has seen strong demand from the affluent downsizer and empty nester market.
"Our downsizer market, who are not necessarily highly leveraged with debt and taking advantage of the current cash rate, are not afraid to overcapitalise for the right property," Mets says.
"This audience segment understands that buildings like our most recent multi-residential projects, Canvas, Chalk and York are incredibly difficult to replicate due to the industry wide construction crisis and land prices making projects not commercially viable.
"Our buyers want certainty around construction timeframes and an opportunity to make customisations to their residence through the sales process."
Mets says the absolute necessities for buyers are privacy, adequate security, an absolute minimum of 150 sqm internally, progressive technology features, and secure car accommodation.
Read more: City Beat July 2023: Brisbane "has come of age" as apartment demand booms
Read more: City Beat June 2023: Brisbane's tight supply drives off the plan apartment sales
