Property research company BIS Oxford Economics recently published a detailed report on the state of the Brisbane apartment market. We have noted for many months now the depressed state of the Brisbane market, and the BIS Oxford Economics report reinforces this, but the question we ask ourselves, and which every buyer of course is asking themselves, is have we hit the bottom of the market? As buyers, that is what we all look for of course. The ideal time to buy is naturally at the bottom of the market, but it is extremely difficult to predict. So are we there yet?
Over the past 5 years record levels of new apartment completions have tipped inner-Brisbane’s apartment market into over supply. This has pushed down price growth as well as rents and put property developers under huge pressure to achieve sales.
BIS Oxford state that 52 projects have been abandoned or deferred over the 2017-18 period. This is a huge amount of new supply taken out of the market. We still have the existing supply coming through though, with an expect 8,300 new apartments expected to be completed in 2017-18. This is up from the 5,700 apartments that completed last year. 2019 will be more in line with the long term trend, decreasing to about 5000 completed apartments.
We recently looked at the Herron Todd White (valuers) Property Clock which put the Brisbane market in the status of decline. Sounds bad, but right after the status of Decline is Bottom of the Market – just what buyers are looking for!
Well the question is – are we at the bottom of the market – is it time to buy?
It really is impossible to pick the bottom of the property market. We really can only know when we reach this point in hindsight, however we are getting close to this point now in the Brisbane market. With a high level of completions this year, a generally soft local market, reduced international demand and tight financial controls being imposed by the Banks, property developers are under a lot of pressure to make sales. It really is a buyers market, which sounds a lot like a good time to buy!
For first home buyers, this over supply is even more important. Lowered apartment prices, combined with the government grant, means that entering the new and off the plan apartment market is easier now than ever.