So who will live in all these new apartments?!
Like all good explanations of real estate trends, the truth is probably somewhere in the middle. Brisbane’s inner-city is undergoing a surge in new apartment construction and, depending who you believe, we’re either about to be flooded with so many surplus dwellings that prices and rents will plummet – or residents from south of the border will blindly relocate to our city like moths to the lightbulb, filling our inner-suburbs to the brim.
Our agency’s an active observer in the changing inner-Brisbane marketplace. We handle the property management and re-sale of local apartments so we’re witnessing demand at the coalface. So here’s what’s on our radar:
Investors are driving demand for off-plan apartment sales, as they always have and probably always will. Despite what developers love to tell you, their buyers are not dominated by owner-occupiers, who are cautious in buying something they can’t touch and feel. But once these buildings are completed many of the re-sales see tenants moved on for the strong owner-occupier market, those buyers typically out-bidding investors in the continually growing demand for an inner-city lifestyle.
We commonly think of apartment residents as ‘before, after or without kids’ – but a noticeable trend is family buyers. And not just for larger 3 bedroom designs. We recently sold a 2 bed South Brisbane apartment to a couple with 2 kids who travel a lot with work, want the convenience of city living and, no surprise here, want to be inside the Brisbane State High School catchment. West End State School is a great example of this trend in action. According to local councillor Helen Abrahams every child in last years’ prep intake lived in a unit (kids of 4-5 years age). Many couples now resist the move to outer suburbs when they have children, outweighing their own patch of grass for the convenience of the city.
There’s also a really high underlying demand from empty nesters still waiting for the right offering to tempt them out of the burbs. We see this when we list any quality 3 bedroom apartment, our open houses crowded with eager women with their unwilling husbands! Having cafes, boutiques and entertainment at their doorstep draws them in. A fear of losing privacy, noise from neighbours or what to do with the 5 spare rooms of “stuff” sends them back to whence they came. But they do buy eventually and as positive word spreads the momentum grows.
Combined with this growing local demand for our inner-city homes the forecasters point to interstate and overseas migration. Diana Howes of Resolution Research: “Queensland’s rate of interstate migration is forecast to recover in 2015 to be the highest in the country. According to leading analysts BIS Shrapnel over 2015, 2016 and 2017 Queensland will lead the nation in terms of net interstate migration. The number of interstate migrants choosing to call the state home to be more than double that projected for Victoria.” Add in more than 100,000 overseas arrivals to Queensland and Howes says we’ll have new dwelling demand at its highest in almost a decade. She points to the low supply in new apartments post-GFC, with a period of catch-up needed to ensure adequate housing stock.
As local real estate agents we’re witnessing an inner-city rental market with a strong supply of new apartments, fed by those off-plan investors, and a good choice for tenants in months to come. But we do see it as a short-lived blip in oversupply. Like an extra tray of sandwiches laid onto the smorgasbord when the restaurant’s half-empty, but with a bus load of hungry diners pulling up out the front! Brisbane’s inner-city is a delectable treat and the appetite for our lifestyle continues to grow.