Apartments and Townhouses

3.3

APARTMENTS AND TOWNHOUSES

Brisbane

The Brisbane apartment market is showing early signs of recovery from the COVID-19 pandemic. Government incentives, low interest rates and improved confidence have encouraged buyers to progress with their decision to purchase.

Buyer confidence in the Brisbane property market has increased and is evident by the rate at which current stock is being absorbed. The most popular configuration continues to be the two-bedroom (58% of sales). Three-bedroom units were the next biggest sellers in terms of market share (25% of sales). Onebedroom apartments have seen a fall in popularity as the investment market has not yet seen a return in confidence.

The inner Brisbane apartment market has seen a ‘rubber-band’ like effect in terms of the relationship between supply and demand of new apartments. During 2017, the Brisbane market saw the peak of new apartments being completed and delivered with around 6,100 new apartments being added into the market. Since this peak, both buyers and developers have been reluctant to enter the market as they awaited more favourable conditions. However, current estimates suggest that additional apartment developments are required to satisfy the pent-up demand created by a surge in buyer interest during the pandemic.

Inner Brisbane Off the Plan Apartment Completions

7000

6000

5000

4000

3000

Gold Coast

The Gold Coast apartment market has seen a sharp decline in vacancy rates, the current rate has tightened to 1.6%. Some suburbs have vacancy rates as low as 0.2%. These low vacancy rates are due to the combination of, first, migration from southern states and, second, a reduction in investment lending which dampened the supply of new investment properties.

First home buyer loan applications remain robust assisting demand in the Gold Coast market and leading to suburbs recording strong price growth (as high as over 11% price growth on a year on year in 2020).

Interstate arrivals to Southeast Queensland and in particular the Gold Coast have been strong especially from both New South Wales and in Victoria. This has helped Queensland record the highest level of net interstate migration in Australia.

Some developers, especially those with high-end owneroccupier targeted apartments, are struggling to keep up with the surge in demand for new apartments. Forecasts suggest that demand is expected to increase with the continued easing of border restrictions into 2021.

2000

1000

0

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021