Australian Property News

Off-the-plan apartments do well in Brisbane

Posted on Tuesday, September 07 2010 at 8:59 AM

It might be a buyers’ market for established residential property in Brisbane at the moment but off-the-plan apartments have been selling well.

Colliers International research analyst Lachlan Walker says the general real estate market in Brisbane is currently a bit slow and with plenty of stock around buyers can take time in making their decisions.

But he says the June quarter was the best quarter since 2002 for unconditional off-the-plan apartment sales.

Buying off the plan gives people the ability to buy at today’s rates with a 10 per cent deposit, he says, for a completion in two years, at which time hopefully we’ll see a return to the market of the pre-global financial crisis climate and values.

There’s a risk that the apartment market might not perform, according to Walker, but underlying demand is saying otherwise. There are expectations that southeast Queensland will need 7000 apartments per year in infill developments to support population growth but that hasn’t happened in the past and won’t in the foreseeable future either, he says.

Walker points out that off-the-plan sales may be doing well because prices can be reduced for that sort of stock to meet the market, which the existing market can’t do, and apartments are more popular because they’re more affordable.

The reason the Brisbane residential property market might be a bit slower than other capital cities as a whole, like Melbourne and Sydney, is that there aren’t as many international buyers, according to Walker.

He says buyers from overseas have an awareness of Melbourne and Sydney but many have never heard of Brisbane and that’s holding the market back somewhat.

But on the flip side he says Brisbane is starting to see more interest from southerners again.

“Sydney and Melbourne people are starting to look north again,” he says. “It’s a value proposition – you can’t buy anything in Sydney for under $500,000 in the CBD, whereas in Brisbane you still can.”