A record $3.2 billion worth of new apartments sold within 5 kilometres of Brisbane city in 2015 with the December quarter, reaching the fourth-highest level for a quarter in at least five years.
However, market analysts expect the next 12 months will not be as easy for developers.
The latest numbers from Place Projects show that 1293 new apartments sold in the three months to December, down slightly on the 1385 sold in the September quarter and below the record, of 1621, posted in the corresponding December quarter of last year.
“The December quarter tops off what has been a historic year for the inner-Brisbane off-the-plan market in Brisbane,” Place Advisory director Lachlan Walker said.
“However, there is an expectation that 2016 will be a tougher 12 months than 2015. Construction prices are set to have the biggest impact on Brisbane residential development, either forcing prices to rise and reducing sales rates, or squeezing end profits for the developer.
There are 2208 new residential apartments for sale across the inner-Brisbane market, equating to a supply of 5.1 months.
FINANCE, RISK SIGNIFICANT FACTORS
Place forecasts a pipeline of more than 21,000 apartments that have not yet hit the market. These projects are in planning and Place said the likelihood of making it into the marketplace depended on a variety of factors, the biggest of which being finance and risk.
Consolidated Properties managing director Don O’Rorke, who has just seen his latest $200 million apartment project, Spire, sell all 340 apartments, said Brisbane would not be hit by an oversupply.
“We don’t believe we have reached an oversupply in Brisbane because the market has taken off a lot later than Sydney and Melbourne, and there is still plenty of value compared with those two markets,” Mr O’Rorke said.
“Everyone is focusing on settlement risk, and our approach is to have a balance between owner-occupier and investor as well as a maximum of two apartments per buyer, and less than 25 per cent of sales to overseas buyers.”
During the December quarter the best-performing projects in Brisbane included Oxley & Stirling by ARIA with 215 unconditional sales, followed by Capri at Newstead Central and Utopia Space with 98 sales apiece and stage two of South City Square, with 97 unconditional sales.
Place’s Mr Walker said with council elections in March and a looming federal election, the south-east Queensland property market would “definitely see some peaks and troughs”.