The recent Insights Event Series “2017 Residential Market – A Developers Perspective” convened by The Urban Developer and hosted by Colliers was extremely well attended by a wide variety of Brisbane property identities. Disappointingly, the expert panel comments were less about the developers perspective and more about agency opinion and an interpretation of the number of hits on projects on the Real Estate.com web site. Fortunately; the always impressive Alex Levy from Mirvac was able to provide some actual real world insight to the discussion and confirmed that the right projects in the right locations will always be well received by an educated market. We were also reminded by Brendan Tutt from the Tessa Group, that Queensland has a history of over building and this has been unprecedented over the last 2-3 years. This “overheated” market for (small investor) units has gone off the boil in a spectacular fashion, as we always expected it would, and it was suggested that we have returned to a “normal” level of sales. This has benefit for the rental market by providing a wide range of choice at competitive and negotiable rents with lease incentives. We were told that 90% of the rental market in the Valley area is under 30 years old and, while the rents are dropping, there is no letup in demand for new apartments. This has had an effect on vacancy rates for apartments growing in the secondary rental market despite this stock usually offering larger unit sizes. Interestingly, the “middle ring” townhouse market in Brisbane is very strong and this is primarily being driven by Sydney buyers looking for non-apartment options. This strong market is also evident in the smaller suburban projects where well-designed apartment developments close to transport, shops, restaurants and with good parking are being preferred to the high rise “future slums” of the city fringe. Already, we are seeing astute developers in areas such as Teneriffe and Hamilton going “back to the future” and offering larger apartments with generous balconies and appropriate car parking and storage to a grateful owner occupier market with a pent up demand. Missing from the discussion was any real comment on the market outside Brisbane, except to state the obvious about the effects of the downturn in the mining industry, and the increasing growth in the over 50’s and “empty nesters” residential market (can we please come up with better terms than “downsizing” and “early retirement living” for this demographic?).
In August 2014, Len Powe examined the impact that marketing driven perception was having on the price sensitive world of apartment design. To revisit these prophetic thoughts please go to: https://www.powearchitects.com/news/death-knell-sounded-3-bed-apartments/
Insight by Len Powe – Director POWE Architects
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Any views or opinions presented in this article are solely those of the author and do not necessarily represent those of POWE Architects.