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R E I Q J O U R N A L
| J U N E 2 0 1 6
P A G E 3 6
Is supply exceeding
demand in the
Brisbane Inner City
apartments market?
WORDS BY KARINA SALAS, REIQ ANALYST
Brisbane’s inner-city apartment market is in the spotlight
again, as experts and property observers try to come to a
conclusion – is it oversupplied or not?
While the crane index is certainly
high at the moment, with more than
a dozen cranes on the skyline, these
are building a range of projects and
are not solely constructing residential
apartments. (Last month’s
Journal
featured research from Knight
Frank that focused on the range
of commercial buildings nearing
completion in inner Brisbane).
So to understand the inner Brisbane
apartment market it’s important to
look at the data. What level of supply
is coming onto the market and how is
demand poised to meet that supply?
Supply – Building approvals
The Australian Bureau of Statistics
(ABS) reports a large concentration
of medium and high-density
developments in Brisbane’s inner ring.
There were 5,853 building approvals
recorded for inner Brisbane for the
nine months to March 2016, and
about 95 per cent of those are for
semi-detached, terrace houses or
townhouses, flats, units or apartments.
The building approvals and the
consolidated value of medium and high-
density developments in Brisbane’s
inner ring reported a significant
expansion of about 50% in financial
2015 compared to financial year 2014.
The updated building approvals data
to March 2016 appears to indicate
that the expansion has eased with the
number of approvals expanded only
by about 5% in the first 9 months of
FY2016 compared to a similar period
in FY2015. This is just the initial sign
of a market supply correction.
Furthermore, while residential building
approvals data is an indication of the
potential increase of the property
supply, there is no guarantee that
developers will decide to go ahead with
the project. In light of recent property
statistics and media headlines property
developers may start reassessing the
viability of their projects.
Brisbane inner north and Brisbane
inner have reported the largest
amount of medium to high density
building approvals for the last 21
months. Newstead and Bowen Hills
are leading the tally with more than
4,060 building approvals and South
Brisbane follows with more than
2,720 building approvals.