“We are not discounting [the original prices of] apartments in Brisbane, but rather managing an orderly sell down of any remaining stock we have,” Metro marketing and sales general manager Phil Leahy said.
Unit sale prices are still falling in Brisbane.
Photo: Peter Braig
Brisbane’s property market has set a median house price record for the past 12 months, hitting $670,000, but units continue to struggle as median prices fall.
The 3.1 per cent price increase reported in the March quarter showed Brisbane’s “resilience” against market challenges, the Real Estate Institute of Queensland said.
While prices went up, listings were falling 6.4 per cent compared with March 2017, making it a buyer’s market as properties were lasting about 32 days before being snapped up.
REIQ spokeswoman Felicity Moore said it was likely buyers would be placing more pressure on real estate agents to view properties early and put in offers as soon as houses came onto the market.
As median house prices grew, the unit market saw such strong supply it lost 1.8 per cent off the annual median price of $442,000 in Brisbane, and state-wide 3.8 per cent.
The annual median price for a Queensland unit is now $400,000.
Ms Moore said it was likely the surplus units constructed in and around Brisbane would be filled, the only question was when migration and population growth would help fill the gaps.
Overseas migrants saw Brisbane as the place to be, bringing 12,847 residents into the city, followed by the Gold Coast and Moreton Bay.
“Queensland has become the number-one destination for internal migration, taking over from Victoria in the latest ABS census data, and our overseas migration is at its highest level in years, which means demand for accommodation will continue,” Ms Moore said.
Citing the extensive infrastructure and roadworks scheduled for the city, including major retail developments such as the $1.4 billion Dexus redevelopment of Eagle Street Pier, the REIQ’s report said it was hoped such development would strengthen Brisbane’s economy and support the housing market.
But while Brisbane’s housing market showed relatively strong signs of growth, the Gold Coast and Sunshine Coast both tracked more strongly.
The annual median house price on the Gold Coast jumped 6 per cent over the past 12 months for an average of $620,000 – the highest growth in the state.
Gold Coast units increased 1.9 per cent to $428,000 for the year, while the Sunshine Coast unit market rose 2.8 per cent to $405,000.
Overall Queensland’s house and unit sales fell throughout the year, although the REIQ said some regions such as Rockhampton and Townsville were benefiting from increased investment.
Shoring up the real estate market, internal migration figures showed the Gold Coast, Sunshine Coast, and Moreton Bay were most popular as people sought a lifestyle close to the city and the beach.
The questions around unit prices and their overall value on the Brisbane market were backed up by Domain data that showed Brisbane’s median unit price had dropped every quarter since June 2016 to reach a four-year low.
While the housing market stayed relatively steady, Brisbane’s rental market grew steadily with about 3000 new rental properties added to the city’s local government area.
Rents in Brisbane have risen about $10 to $20 in the quarter but remained steady compared with the same time last year, while Ipswich recorded the highest rental vacancy rates of about 3 per cent.
Couple turns $145k into $7.5m
The massive 1.97Ha site of their family home sits in the middle of Wakerley, about 16km to the east of the Brisbane CBD – a popular area with families that’s been targeted for major subdivision work.
Property records released last week show a $7.5m deal was struck off market in late March, while just two years ago, the site was valued around $1.1m. It’s believed the property was bought for $145,000 in 1987.
Preparation for the development approval began last year, with the couple then selling to a firm that then filed a development application to split the site into 27 housing lots in the first stage and five lots in the second stage.
The large “rural” home site was surrounded by residential subdivisions on three sides and fronts Manly Road – one of the main feeder streets to the area. The new plans mean it will join seamless into the other subdivisions in the area.
The company that bought the site received development approval from the Brisbane City Council in May and waived the appeal period.
The previous highest price fetched in Brisbane’s east was at 114 Virginia Avenue, Hawthorne – an ultra-modern six bedroom, five bathroom, six car space home that sold for $7.48m in six years ago.
Built in 2008, the Viriginia Avenue home has solid concrete walls and floors over all levels, with full walls of glass fronting the river.
Metro Property’s discounts leftover Brisbane apartments
Want a bargain? Metro’s Newstead Towers in Brisbane has 20 per cent discounts. Supplied
Real estate agents are offering 20 per cent discounts on apartment sales at four of Brisbane-based developer Metro Property Development’s Brisbane CBD projects as the apartment market continues to face headwinds.
Along with 20 per cent discounts on one and two-bedroom apartments, buyers were being offered a 4.5 per cent rental one-year guarantee at Aqua Newstead, Broadway on Ann, Canterbury Towers, and Newstead Towers. These apply to apartments priced between low $400,000 to nearly $600,000.
The oversupply problem in Brisbane is heating up, with the Queensland Treasury now warning its apartment market could take a turn for the worse, especially if the bigger Sydney and Melbourne markets begin to falter.
But Metro said the discounts applied only to residual stock, not entire projects or launch prices, with residual discounting being part of a business-as-usual stock clearance.
“The heat has certainly come out of the Brisbane market from where it was a couple of years ago, but we see it as just back to normal market conditions with good buying opportunities and plenty of growth potential in the coming years to buyers entering the market now.
“We have already secured buyers for the four buildings and are in the run up to settling the last of these units over the next couple of months.”
He said discounts were sometimes offered by agents on their own accord, hoping developers would accept the lower prices.
“We see this all the time, however I can confirm there is no discounting to our [original] price lists and we have been successful in maintaining pricing levels thanks to the locations, amenity, inclusions and designs offered in the apartment projects we have been selling,” Mr Leahy said.
Discounts aside, a 4.5 per cent rental guarantee was reasonable and agrees with SQM Research’s data which show the latest rental yield for two-bedroom units in Brisbane was close to 5 per cent.
“We are taking an average of 18 days from handover to secure a tenant via our in-house rental team. Given this strong demand, we do offer a one-year rent guarantee to investors,” Mr Leahy added.
“We are having excellent success getting investors from both Melbourne and Sydney to look at Brisbane as a more affordable investment option than the other wo capitals vis-à-vis lower purchase prices with high rental yields.”
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