BRISBANE apartment owners are facing a serious price correction because the market has failed to cope with the soaring levels of new builds being constructed, the central bank has warned.
In the Reserve Bank of Australia’s biannual Stability Review released yesterday, (FRI) it has highlighted Brisbane’s concerning apartment market, stating that it’s “relatively weak with declining prices and no growth in rents.”
“Some concerns remain about the process of absorbing the substantial increase in new apartments in Brisbane,’’ the RBA warned.
“Brisbane apartment prices continue to fall although the rate of decline has slowed.”
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Latest CoreLogic data shows Brisbane house prices were 4 percent up over the past year, compared to unit prices that remain 2.5 percent lower during the same time frame.
Rental conditions in Brisbane fell by 0.1 percent in the past year.
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Falling Melbourne apartment prices and weak conditions in Western Australia were also highlighted in the review — in Perth, their vacancy rate is the highest it has been in 25 years and more than double the average of other capital cities.
The banking regulator, the Australian Prudential and Regulation Authority, has forced lenders to put a 30 percent cap on interest-only loans and also limit investor growth to 10 percent for new lending to residential property investors.
Originally Published: www.news.com.au