The apartment market has started to unravel with Brisbane sales and prices falling. Photo: Bradley Kanaris
Apartment construction and demand have started to slow in Brisbane, property consultants Urbis say.
Several developers have paused developments and apartment sales have fallen again in the June quarter for the third consecutive quarter, the lowest volume since early 2014.
Importantly, apartment sale prices had also been steadily decreasing since the end of last year, particularly with two-bedroom units.
The weighted average sales price for the June quarter was $578,580. This was a decrease of $17,084 since the March quarter with the weighted average sales price decreasing consistently since the December 2015 quarter, Urbis said.
New development launches have also declined.
“We are seeing the market continue to self-regulate, returning to a more sustainable level of activity and giving the market time to absorb the current stock available,” Urbis Associate Director Paul Riga said.
“Essentially the sales are still there but they are much harder to achieve for developers.
“Many of the monitored projects have moved into the construction phase, winding down the level of sales and marketing.”
There are 25 projects due to launch for the rest of the year, bringing to the market a potential 2850 new apartments in Brisbane, half the level of supply at the same time last year.
In Sydney, demand for apartments have also started to slow to more “normalised” levels. Two years ago, many inner-city projects such as Greenland’s North Sydney project Lucent and Country Garden’s Ryde Gardens sold out on the first day of launch.
But over the weekend, Chinese developer Starryland sold 70 apartments out of the 145 offered in the third and final stage of its Promenade Parramatta apartment project. Its first two releases in 2014 and 2015 have sold out.
Iris Capitol’s boutique Hurlstone Park development, “Wattle Hill” managed 16 sales out of 42 apartments.
“Sydney remains solid in its level of transactions, based on preliminary data,” Mr Riga said.
“The level of rental demand is still at a very high peak. Even with the supply of new apartments, there seems to be a demand pulling new projects.
“Even though Sydney has cooled, the rental market is still pushing for more product … but it is area specific.”
Melbourne, like Brisbane, is coming “off peak” and has experienced a slower quarter. But it is still stronger than Brisbane.
Original article published at www.domain.com.au