Luxury apartments and suburbs with desirable school catchments continue to outperform. Photo: Tammy Law
The new unit oversupply is well entrenched in pockets of inner Brisbane, but one type appears to be feeling the pressure the most.
According to experts, investor stock without car parking is bearing the brunt of the soft new-unit market.
Herron Todd White director, David Notley, said it was difficult to calculate an exact median price differential due to location variables.
However, he said recent sales evidence showed units without car parking were experiencing market resistance and an increased reduction in value compared with those with a car space due to the limited demand in the market currently.
“In terms of resale, we’ve seen a move where if the unit doesn’t have a car space it’s softening quite significantly in comparison with the rest of the unit market,” he said.
“There’s a fair bit of resistance around the fact that it doesn’t have a car space; there is very little demand at the moment.”
Mr Notley said car parking remained a necessity for most unit buyers, and with more supply than demand in some areas, those without parking were on the outer with buyers.
“There are coming under a lot more pressure than units with a car space,” he said.
One-bedroom units without car parking are currently on the market for as low as the early $200,000s in Fortitude Valley, while one-bedroom units with car parks in Newstead are listed on Domain from about $350,000.
Bees Nees City Realty’s Rob Honeycombe said tenants had long been searching for car parking in Brisbane’s inner-city.
In fact, car parking was the number one requirement for the majority of tenants, he said.
“Given a list of lots of creature comforts like en suites and airconditioners to choose from, our bi-annual survey found the top concern for tenants is a spot for at least one car off-street,” Mr Honeycombe said.
“Car parking is getting harder to find on-street and many tenants are still fairly car-dependent.”
Mr Honeycombe said while there was a market for units without car parks, it was small and was limited to studios and one-bedroom designs.
Even then, if there was no car parking, it was difficult to attract buyers and renters, he said.
“It’s very hard to sell or rent them unless they’re right on the doorstep of major employment nodes and lifestyle and entertainment areas. It’s really got to be an easy walk from the middle of Brisbane,” he said.
Changes made to Brisbane State High School’s catchment zone are already affecting properties for sale in the area, according to local real estate agents.
The state government released new catchment maps last week which revealed Brisbane State High School’s catchment zone could be cut by 25 per cent to manage pressure on its rising enrolments.
The school’s current catchment stretches through West End and out to Dutton Park but, under the new draft catchment, students from more than 500 households in Dutton Park, Woolloongabba and Highgate Hill would no longer be eligible for direct entry to State High once the neighbouring high-rise school in Dutton Park opens in 2021.
19A Gloucester Street, Highgate Hill, recently went under contract with four offers in one weekend because it will still fall in the catchment.
It’s been a devastating revelation for homeowners who bought in the area specifically to be in the catchment of Queensland’s top performing state high school, said Sam Peterffy, of Harcourts Homeside.
Not only are they upset at being kicked out of the catchment, they’re worried the value of their property will fall because if it, she said.
“Of course the people who are already living here are worried — many of them bought here for the school,” she said.
7 Grantham Street, Dutton Park, is a six-bedroom family home that would fall outside of the Brisbane State High School catchment.
“I feel sorry for these people. They might have young children, aged five and under, and bought here planning for their children’s future. Now that’s up in the air. It’s not a great situation for them.”
Ms Peterffy said the local property market had already been affected.
“From a buyer perspective, I have people who were looking in these areas and have straight up said they’re no longer looking at Dutton Park or anywhere that’s out of the catchment,” she said.
7 Grantham Street, Dutton Park: Marketing agent Ben Salm said being outside the BSHS catchment zone could potentially affect property prices of those homes who are currently in the catchment zone.
Brisbane State High School is a 3200-student strong, selective GPS school, sought-after for its top academic results and extensive extra curricular program.
Demand for places is so high, the school employed an investigator this year to uncover families rorting the catchment system.
Ben Salm of Place Estate Agents is selling a beautiful six-bedroom family home at Grantham Street, Dutton Park, that is currently in the State High catchment, but would be bumped out under the new plan.
He said it had already affected the property’s desirability for some buyers.
“It’s something we’ve seen a fair bit of with feedback from the buyers coming through,” he said.
“They’re unsure about the new school because it’s all so unknown at this stage; that creates a hesitancy and then you get less competition, which potentially means lower prices.
“Because this house is now looking like it’ll be out of the State High catchment, the feedback we’re getting suggests the price could be $50,000 less than what it might have been worth three to six months ago.
“There is a grace period though, so you never know what will happen.”
It’s important to note the effect on current and future families will not be immediate. Brisbane State High School students living in the proposed catchment zone for the new school will be allowed to remain enrolled at State High for the duration of their studies, while their siblings will still be able to enrol under transitional arrangements.
The government also said that families with primary school children living in a street which appears on both catchment maps can choose to enrol their child at either school.
But the changes are causing a lot of uncertainty. Ms Peterffy recently sold a house at Gloucester Street, Highgate Hill, a street where some houses will still fall in the catchment and others won’t.
This particular house will still be in the catchment, so the competition to secure it was strong, with four offers in one weekend, Ms Peterffy said.
“I had a couple who argued about it. The husband was saying that the new school was likely to be great but the wife was really worried about it,” she said.
“She just kept saying, ‘But it’s not going to be Brisbane State High, it won’t be the same’. So for them, the fact this house would still be in the catchment in a few years’ time was very important to them.
“That said, there will always be people who will want to buy in Dutton Park anyway. It’s the best suburb in Brisbane in my view.”
And Ms Peterffy said the silver lining would be in the new school, Inner City South State Secondary College, which had the potential to bring new buyers to the area long term.
“Some buyers who may not previously had Dutton Park and surrounding areas on their radar may come here because there is going to be a shiny new school with the best of everything and a connection to the University of Queensland,” she said.
“I know everyone wants to be in the State High catchment right now but my prediction is this new school will be in the top 10 state high schools in Queensland very quickly.”
Mr Salm said the property market could pick up again in these areas once the plans for the school are finalised and released to the public.
“It could actually create quite a bit of excitment in the area once there’s a lot more detail released and prices could go up again,” he said.
“I think in the long term this school will be competition for State High but at the moment it’s making buyers unsure about being in the area, and will only make competition for property staying in the State High catchment even tougher.”
The maps and the enrolment management plan are out for public consultation until September 30.
The Urban Developer recently published our first medium-density development round-up, covering five low-rise development proposals in Sydney.
This week we turn to sunny Queensland to seek out the latest in low- to medium-rise development in Brisbane – uncovering nearly $200 million worth of proposals that have recently entered planning assessment.
1. 79 Swann Road, Taringa
Developer Sanchi’s proposal for “Green Spines” at 79 Swann Road, Taringa.
Its proximity to the University of Queensland and public transport makes Swann Road a popular destination for developers.
Sanchi Development has proposed a 6-storey Cottee Parker-designed project that will include 3-levels of basement parking.
The proposal is located nearby the Indooroopilly shopping centre and south-east bikeway with the Taringa Train Station and bus stops within 400 metres of the site.
The building will host a communal roof top terrace with views of Mt Coot-tha which will include a gym and BBQ facilities.
2. 69-71 Swann Road, Taringa
Artist impression of Mosaic Property Group’s Swann Road, Taringa project.
Local developer Mosaic Property has proposed a low-rise, five-storey development at 69-71 Swann Road in Taringa.
The 1,256sq m site was purchased for $3.1 million and will be developed to deliver 16 dwellings.
Subject to approvals, construction will start early next year and is expected to cost $19.2 million.
3. 8-10 Amersham Street, West End
Arkhefield implemented the Breath Design Philosophy to embrace natural light, ventilation, and passive cooling.
Developer Amersham Street Pty Ltd has lodged a proposal for a 5-storey residential development in Brisbane’s hip suburb of West End.
The $20 million project will create 23 units as well as 39 car parks with an estimated $9 million construction cost.
Each apartment has its own balcony or private terraces with the building topped by a rooftop garden with a fireplace and BBQ for tenants to take advantage of city views.
The project will launch to market early-2019.
Editor’s note: Adam Di Marco, founder of the Urban Developer, is a director of Amersham Street Pty Ltd.
4. 77 Walkers Way, Nundah
Dennis Family Corporation’s proposal for 32 triple-storey townhouses in Nundah.
Dennis Family Corporation has lodged plans for 32 triple-storey townhouses along 77 Walkers Way in Nundah.
The $21 million development, designed by Ellivo Architects, is spread across 7,069sq m of rural zoning.
The project will include of 4,902sq m of communal space and 1,556sq m of private open space.
The site is located in within a 1 km of Toombul Shopping Centre and 3.5 km of Brisbane Airport.
The Dennis Family told The Urban Developer construction was expected to start late-2019 following pre-sales.
The property group is also going to tender to select a construction partner for the project.
5. Parkside, Springfield (Stage 2).
Springfield City Group $39 million second stage in the heart of Springfield Central.
Springfield City Group’s second stage development in the heart of Springfield Central will create 74 apartments as well as 196sq m of ground floor commercial and retail space.
The $39 million development, designed by Plus Architecture, will overlook Robelle Domain Parklands and will be walking distance from Orion Town Centre and Springfield Central Train Station.
Construction commencement will be dependent on pre-sales, however, Springfield City Group told The Urban Developer the target commencement date was forecasted for the second or third quarter of 2019.
A builder has not yet been appointed to the project.