“At the same time, any loosening of lending constraints should see the investor purchaser number start to rise, particularly with yields and rental rates strengthening and economic drivers remaining stable.”
Despite recent oversupply, Brisbane’s situation looks positive compared to the southern markets, with interstate interest continuing. More than 24,000 residents migrated to Queensland over the 12 months to September 2018.
Comparatively, New South Wales saw more people leave the state than arrive, registering an interstate migration net loss of 22,100 residents.
“Whilst there are a number of challenges in the development space, opportunity exists across multiple Brisbane sub-markets,” Riga said.
“We have seen boutique projects that have targeted a wide spread of buyers at affordable price points launch successfully, with buyers attracted to the price points, amenity and inclusions.”
Brisbane’s premium market is also seeing a flurry of activity, however Riga warned of risks for buyers in this market generally take longer to transact.
“This market of premium buyers is expected to sustain growth moving forward as our Brisbane market matures, and acceptance of the apartment lifestyle spreads across multiple demographics,” he said.
“Ultimately it comes down to ensuring that each development aligns the potential buyer market with the pricing and inclusions that they expect.”
Predictably, a significant portion of buyers spending $2 million-plus on apartments continue to be down-sizers, swapping the family home for a large inner-city apartment.
At the lower end of the market one-bedroom apartments have continued to remain popular with inner Brisbane renters.
Urbis found that one-bedroom, one-car space apartments had the highest average number of rental applications per apartment with the inner south and CBD recording higher rents on average.
Hopes are growing for the apartment market in the Queensland capital. A separate report by JLL earlier this year said Brisbane apartment prices and rents would stabilise over the next 12 months.
For now, conditions in Brisbane, the apartment construction market that was first to boom and also the first to decline, remain weak.