Brisbane unit market still suffering from ‘oversupply hangover’: REIQ
BRISBANE’S unit market is still recovering from “an oversupply hangover”, according to the Real Estate Institute of Queensland — particularly in the investor sector.
But the pain is easing, with many industry professionals noting that the units still available for sale in the city are gradually being absorbed.
The latest REIQ Market Monitor reveals that while unit prices have stabilised, they remain in the softening sector of the market cycle.
But one Greater Brisbane suburb bucked the trend, with Redcliffe on Brisbane’s bayside recording a whopping 38 per cent jump in its median unit price in the three months to the end of June.
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But the REIQ said owner-occupier designed units were finding appeal with buyers — helping to bolster the overall status of the attached housing sector.
The annual median unit price in the Brisbane local government area fell 2.2 cent to $440,000 in the 12 months to June 2019.
The top suburb for unit price growth during the June quarter was South Brisbane, where the median unit price rose nearly 16 per cent.
This was followed by Hamilton and Morningside.
The unit sector across Greater Brisbane generally underperformed, according to the analysis. While Ipswich held steady, Logan saw median unit prices fall 7.9 per cent, while Redland was down seven per cent.
Moreton Bay’s annual unit median price also dropped 5.6 per cent, despite the standout performance from Redcliffe.
Clinton Viertel of Belle Property – Redcliffe said the unit market in the area had been undervalued for many years, but buyers were now starting realise its potential.
Mr Viertel said a lot of baby boomers were selling their houses and downsizing to apartments on the Redcliffe Peninsula, along with interstate investors.
“People who bought off-the-plan three or four years ago are rolling their investments into other new apartments on the Peninsula and buying off the plan again — realising the profit they’ve made,” Mr Viertel said.
“I’ve seen lots of investors from Sydney who’ve earmarked the Peninsula market as being underpriced.”
Mr Viertel is selling a penthouse at 20/75 Sutton St, Redcliffe, for offers over $599,000.
He said the property had four balconies — all boasting views — and the only potential downside was that it was next door to a vacant block.
“For that price point, it delivers significant value,” he said.
REIQ CEO Antonia Mercorella said Logan’s unit market looked particularly challenging for sellers, although supply was being absorbed and the amount of discounting required by sellers was small.
Logan saw an 18.4 per cent decline in total unit listing numbers for 2019, while its stock on market result fell 3.4 per cent.
But in good news for investors, the unit rental market continues to perform well.
The overall Brisbane LGA vacancy rate sits at a reasonable 2.8 per cent for the June quarter — just above the previous quarter’s 2.5 per cent outcome.
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This continues the run of sub-three per cent quarterly vacancy rates since June 2018.
The Brisbane LGA median rent for a two-bedroom unit rose $10 a week from the previous quarter to $420 a week.
The detached housing gross rental yield of 3.4 per cent was down just 0.1 per cent on last quarter’s result.
REIQ CEO Antonia Mercorella said people who had bought an apartment as an investment in recent years would be wise to hold on to them.
“In the long run, they will prove to be a terrific investment,” Ms Mercorella said.
She said there was increasing evidence that more people were embracing apartment living in Brisbane.
“Particularly in this day and age, when we’re looking for low maintenance living and something you can just lock up and go,” she said.
Unit rental yields stayed steady in the June quarter across Greater Brisbane, ranging from 4.3 per cent to 6.5 per cent.
Median annual rents for outer Brisbane units ranged from $255 per week in Ipswich to $365 per week in Redland.
Interestingly, it was those locations beyond the 20km radius that saw the tightest outcome with the combined outer Brisbane regions of Ipswich, Logan, Moreton Bay, and Redland recording a two per cent vacancy.