All these new Brisbane apartments and where the buyers are coming from!
Marketing, public relations and outright spin are part and parcel of the property development world. So while the big supply of new apartment buildings have been selling there’s been lots of chatter about customer origins. Many buyers like to think their chosen building will be filled with owner-occupied apartments (perhaps assuming they make better neighbours – we’ve written before about why that’s not a sure thing!). So developers love to tell everyone their sales have gone to intending residents.
So we thought it time to get to the facts.
The surge in Brisbane city apartment supply is not new and we’ve seen consistent building completions over the past 2 years. Our sales people and our property managers are in and out of these every day. The West End/South Brisbane peninsula for example, has already added 990 new homes to the local rental pool over that time. Now completed and occupied and with the local median rent holding firm (but that’s starting to sound like ‘spin’ of our own and best left to another blog post for another day!)
So we’ve dug into the data and looked at a random sample of 750 recently completed inner-Brisbane apartments to find the home address of each of the buyers of these shiny new abodes. This might surprise you, but 31% are from New South Wales, and the majority of those from inner-Sydney postcodes. A further 8% are from interstate.
And just 8% from overseas.
Remembering foreign buyers can only purchase new property, this number surprised us. It’s not the massive quantity some commentators would have had us believe and fear. Overseas sales campaigns can be quite project-specific so we’re not claiming our sample to be completely accurate for all of Brisbane. But it’s some insight. Similarly a couple of the surveyed projects have developers with strong local sales teams so their interstate sales will be lower than many.
What can this one sample, this handful of data tell us? Our summary is the majority of inner-Brisbane’s new apartments are being bought by investors who don’t live in Brisbane. A substantial portion are interstate, dominated by Sydney-siders. Most are signing contracts off-plan, somewhere between 2 and 1 years before the building’s completed. And if these Sydney investors are using equity in their own home as loan security, or other residential property in the cockroach capital, those homes have gone up by approx 14% over the past year. By approx 30% over the past 2 years. They have incredibly fast-growing equity with which to secure their investment loans.
We’ll leave the assumptions right there lest we get into more spin of our own! No-one could logically argue that rents will remain at current levels over the next 2 years with such a large number of apartments being built. But we can’t help but challenge the ‘doomsdayers’ who claim these interstate investors will suddenly fire-sale their new Brisbane apartments when their weekly rents might disappoint.
Please share your comments. We’d love to hear your thoughts!