THE PROPERTY DEVELOPMENT REVIEW
Market Insights
NAVIGATING PEAKS AND VALLEYS: BRISBANE’S 2023 INNER-CITY APARTMENT MARKET REVIEW. As we approach the end of the year and Christmas looms, Brisbane’s inner-city apartment market reflects a year characterised by both unprecedented highs and emerging challenges.
Colliers
2
Inner Brisbane
Off-the-Plan Weighted Average Sale Price
$1,400,000
$1,313,418
James Matley Colliers Queensland Residential Site Sales Executive
$1,300,000
$1,197,277
$1,200,000
$1,114,488
$1,100,000
$1,036,936
$1,020,656
$1,019,629
$1,000,000
$920,655
$889,126
$890,127
$900,000
$808,403
$831,884
$829,876
$824,187
$816,096
$790,622
$749,829
$767,929
$800,000
$747,816
$736,065
$700,000
$644,877
$600,000
$500,000
$400,000
Quarterly Weighted Average Sale Price
Rolling Annual Avg Price
Source: Colliers & Urbis
attract institutional capital into the residential build to rent sector. There have been challenges with development approvals this year as the market transitions. In Q2 2023 we witnessed the lowest development approval rate since Q3 2019, with only 395 apartments approved, this decline indicates potential challenges in the supply pipeline. As the year concludes, the market outlook for 2024 looks like it will involve navigating uncertainties. Supply constraints are anticipated to persist through the first half of 2024 due to cost concerns and building uncertainties. Developers are exercising caution, holding off on new projects, with the expectation that market resilience will absorb any resulting price increases. Looking further forward into 2024, the market is poised for a delicate dance between peaks in pricing driving demand and falling supply, low sales rates, completions, and project construction commencements. Queensland’s economy will continue to benefit from substantial population growth, a resilient labour market, and international demand for energy resources. These factors along with record infrastructure spending in the lead up to the Brisbane 2032 Olympic Games will set the stage for Queensland’s economy in 2024. Steady demand from investors and local owner-occupiers, particularly downsizers, is expected to remain a defining feature. The market’s ability to adapt to emerging trends will shape the trajectory of Brisbane’s inner-city apartment landscape in the coming year.
This piece lightly delves into the insights gleaned from 2023, providing a broad overview of some key market indicators and a glimpse into the potential trends shaping the landscape in 2024. With interest rate rises and significant increases in construction costs, the residential market has shown resilience despite these challenges. This is due to continued underlying demand from local and interstate purchasers and the limited supply of existing and new housing stock for the growing population. Housing stock continues to sell at a faster pace in 2023 compared to previous years setting the stage for Brisbane seeing record-breaking highs over the year. The average sale prices for inner-city new apartment stock soared to new heights, reaching an impressive $1,726,574 in Q3 2023, with a rolling average of $1,182,309. Such an increase in median sale prices is directly attributed to premium high-end product that is making up the majority of new apartment sales within the market. The Inner Brisbane Weighted Average Sale Price Graph visually illustrates the trends in rolling and overall average sale prices, showcasing the market’s robust performance over the past year. In the rental market we saw a surge in rates and investor interest. Low vacancy rates have propelled a substantial 24 per cent growth in median weekly unit rental rates, rising from $433 to $537 over the 12 months leading up to mid-2023. This surge, accompanied by the potential for increased rental yields, is expected to rekindle investor interest in the new apartment market. As well as further
November / December 2023 – 13
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