Unit surge to swamp city mar­ket

The Australian - - THE NATION - ROSANNE BAR­RETT

Pres­sure is mount­ing for Brisbane apart­ment ven­dors, with a wave of newly con­structed units about to sat­u­rate the al­ready fall­ing mar­ket.

Unit sup­ply in greater Brisbane is sched­uled to grow by 20.4 per cent over the next two years, with 39,420 apart­ments and town­houses hit­ting the mar­ket, ac­cord­ing to re­searcher CoreLogic, in­clud­ing 15,650 over the next 12 months.

Gavin Hul­combe, man­ag­ing di­rec­tor of the Brisbane of­fice of val­u­a­tion firm Her­ron Todd White, said: “In ex­treme cases there are re­sales up to 30 per cent less than the off-the-plan price. What we are see­ing is some of the sec­ondary, lesser de­signed, lesser built apart­ments are not see­ing price growth.”

Such fears have caught the at­ten­tion of the Re­serve Bank, which is mon­i­tor­ing de­vel­op­ments for price drops, va­can­cies and con­tract fallovers.

BIS Ox­ford Eco­nomics has tipped price falls for units of 7 per cent be­tween now and 2020 — 14 per cent in real terms. Lat­est fig­ures from the Real Es­tate In­sti­tute of Queens­land show an over­all de­cline in the av­er­age price of apart­ments of 2.3 per cent in the June quar­ter.

Fly-in, fly-out worker Re­becca Tavo, 34, has just listed her onebed­room, one-bath­room, one-car unit in in­ner-city Tener­iffe for sale on Gumtree, with hopes of a $450,000 sale. Af­ter own­ing the apart­ment for about eight years, the mine worker and elite sportswoman ex­pects to get her money back and re­turn to Western Aus­tralia.

“I don’t have any qualms I will sell it, it will just be at what price,” she said. “All I know is every­one wants to be there (Tener­iffe). All the young peo­ple, they all want to be around that area.”

Apart­ment de­vel­op­ers are throw­ing in fur­ni­ture pack­ages, dis­counts and rental guar­an­tees to se­cure sales, with a back­log of more than 2200 units — about two years of sup­ply — still await­ing to be sold in some projects.

Mar­keters for The Marc Apart­ments in in­ner-city Kan­ga­roo Point are knock­ing $5000 off the price as well as of­fer­ing $15,000 fur­ni­ture pack­ages, free blinds and a one-year rental guar­an­tee on two-bed­room units for buy­ers who sign up be­fore the end of the month.

PPB Ad­vi­sory head of real es­tate Garry McLean said this quar­ter would de­ter­mine how the mar­ket was likely to fare.

“We are hear­ing mostly pos­i­tive sto­ries,” he said. “Most of the set­tle­ments that have oc­curred have gone rea­son­able well, though it is cer­tainly slower in the tail end.”

He said the “mas­sive surge” in sup­ply fol­lowed a long pe­riod af­ter the global fi­nan­cial cri­sis when lit­tle was built.

“I would ex­pect there to be some price re­duc­tion but, again, we are see­ing the rental mar­ket hold­ing well and we’re not see­ing sig­nif­i­cant un­oc­cu­pied apart­ments com­ing through,” he said.

LYN­DON MECHIELSEN

Re­becca Tavo out­side her Tener­iffe apart­ment

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