_Vacancy has remained steady in the inner suburbs of Brisbane

Overview

• There’s an air of optimism in the Greater Brisbane market with increased population growth and a stronger economy over the past year, with a solid pipeline over the next decade of infrastructure projects.
• Developer finance remains challenging in a cooler apartment market and as a result, almost 4,700 apartments that once launched marketing campaigns have been placed on-hold, unlikely to be built by the end of 2022. This will support the elevated vacancy in the Brisbane inner suburbs.
• The Brisbane City Council requested the Queensland Government approve amendments to the Brisbane City Plan 2014 (City Plan) in late 2018. The proposed amendments to the City Plan would prevent multiple dwellings (apartments and townhouses) being built on 3,000 sqm+ lots in the low-density zone. The blueprint recently released is focussed on design, and those suburban areas which have been underperforming. 

Development Site Values

Greater Brisbane site sales with potential for high-density residential development totalled $288.4 million in 2018, 15% higher than the volume recorded one year earlier. High-density sites made up approximately 71% of total development site sales over the year ending December 2018.

Across Greater Brisbane, excluding CBD sites, the indicative sales rate for high-density development sites remained steady at the tail end of 2018 with an indicative $40,300/per apartment. 

Although turnover has been thin, site values in the inner suburbs have been anchored for the past two years with an indicative rate of $43,800/per apartment, ranging from $32,500 to $70,000/per apartment. 

Likewise, extending to the middle suburbs where high-density sites trend between $25,000 to $35,000/per apartment, little change has been recorded in the indicative value of $32,500/per apartment. 

In the outer suburbs of Brisbane, there has been limited new apartment stock added to the pipeline and as a result high-density site values have held up at an indicative $27,500/per apartment for the past couple of years, ranging from $25,000 to $32,500/per apartment.

Apartment Pipeline

2018 saw the completion of 8,350 apartments in Greater Brisbane, down 22% on the number of apartments added in 2017. This has resulted with improved overall rental vacancy, from 2.6% in December 2017, to 2.3% one year on.

Apartment completions were greatest in the inner suburbs of Brisbane with 7,150 new apartments over this time. Between now, and the end of 2022, another 12,800 apartments are projected either currently being built or marketed with development approval.

Brisbane’s middle and outer suburbs saw 1,250 new apartments completed in 2018. There is another 750 high-density apartments currently under construction and a further 900 with development approval being marketed and due online by the end of 2022.

Across Greater Brisbane there is potential for an additional 9,050 development approved apartments coming on line by 2022, although a significant portion of these funded projects will be determined by presales.

The current pipeline has also taken into account the 4,700 apartments which launched in recent years, but currently not proceeding.