The Brisbane new unit market appears to be turning a corner, with a new survey finding renters are soaking up supply.
Of course, much has been written about the thousands of new units that hit the inner Brisbane market over the past five years.
Part of the reason was the need to stimulate the construction sector following the GFC, the end of the mining boom, and the 2011 Queensland floods.
The Sunshine State’s economy sure did cop a shellacking a few years back, which is why shoring up the building sector was so important.
Building starts falling
In Queensland, high-density building starts reached its peak at 15,000 dwellings in 2015/16, which fell to about 7,500 in 2017/18 and BIS Oxford Economics expects it to fall further to fewer than 2,000 starts by 2020.
The reduction in building activity isn’t just a Brisbane story, mind you, with predictions of a 23 per cent fall in residential building starts across in the country in the next two years.
That is a drop of some 50,000 dwellings from 220,000 in 2017/18 to 170,000 by the end of the 2019/20 financial year.
So, what does this mean for homebuyers and investors?
Well, it means that Brisbane’s new, or near new, unit prices are likely to stop falling sooner rather than later.
One of the peculiarities of the new unit oversupply in Brisbane’s inner-city was that the excess stock was being built in some of its most desirable areas.
While Brisbane hasn’t previously been an overly dense city, the need to build up rather than out was always on the cards and because there was still ample land, most of which was previously industrial, close to the city that is where developers choose to focus.
While there is a paucity of this type of land in Sydney and Melbourne, Brisbane still had a fair supply of it and that means these new unit projects were often built within cooee of the city and the river.
According to BIS Oxford Economics, the new unit correction is Brisbane is well under way and that is probably partly because of the location of these new developments as well as strengthening interstate migration.
It’s not like they were built even 10 or 20 kilometres from the city – they were generally within a three-kilometre radius of the CBD.
Brisbane’s inner city median unit price is now about $455,000, which is about half of what you’d pay in Sydney.
No wonder more and more southerners are making the trek north.
As always, successful property investment should be about long-term planning and goals, which means that investors should not be spooked by market fluctuations generally.
That’s why the ability to see past any market ups and downs is one of the strategies that separates short-term investors from the savvy long-term ones who create wealth while keeping any eye on the horizon.
Getting the right financial advice about the Brisbane property market
After a number of years in the shadow of Sydney and Melbourne, Brisbane’s property market may be about to shine.
Its unit market suffered more than most over recent times, but new intel seems to suggest that those bad times are coming to an end.
This approach has been vindicated many times by our multi award-winning approach.
So, if you’d like to understand more about buying in Brisbane, why not contact Intuitive Finance today to ensure you have the right information and expert support on your side from the very beginning.
If you’d like an expert to teach you more about the Brisbane property market or if you have any other questions, please just contact us directly and we’ll be in touch.
The information provided in this article is general in nature and does not constitute personal financial advice. The information has been prepared without taking into account your personal objectives, financial situation or needs. Before acting on any information you should consider the appropriateness of the information with regard to your objectives, financial situation and needs.