Whether you’ve been contemplating purchasing, selling or already invested in the Brisbane apartment market, there may be good news for you just around the corner. Despite the many doom and gloom news pieces out there surrounding the current market, all signs point to positive for the future of Brisbane’s Inner City apartment market.
Compared to the country’s other eastern seaboard capital cities, Brisbane property prices have remained steady in the wake of COVID-19, with minor decline in the apartment sector. Property sales through June and July were almost 20% above the same period last year and prices have fallen less than 1% since the pandemic hit, setting Brisbane up to be one of the best performing property markets over the next few years.
Record low interest rates present an opportunity for those looking to enter the property market, prompting first home buyers to purchase as oppose to renting. According to the Commonwealth Bank, there was a 6% rise in home buying intentions at the end of the 2019/2020 financial year, returning to the levels seen pre-COVID after a substantial drop in April and May. Paired with the first homeowners grant and increased government funding, it is proving to be a frugal time for first-time buyers to make their break into a previously unattainable property market.
We’ve already seen a decline in apartments being constructed and supply is forecast to decrease as much as 90% by 2023. There are currently 3,000 apartments on track to be completed in Brisbane for 2021, the lowest since 2014. This decline is then followed by a projected 2,000 apartment completions in 2022, a decade-low for our city. Brisbane requires approximately 23,000 additional dwellings each year to cater for its’ expected growing population, many of which are relocated employees of the $28 billion worth of current infrastructure projects. The projected numbers show a significant lack of supply for our ever-growing city and are said to result in increased off-the-plan purchases in addition to serving as an upward driving force for existing product prices.
In good news for investors, rentals yields are also holding steady in comparison to the other state capitals, currently sitting at an average return of 5.2% and average gross rental income of $400 per week. Vacancy rates in Brisbane are likely to hold relatively firm and even tighten over the next few years, driving a sharp rise in rents, yields and an upturn in prices. The length of time in which this occurs and to what degree will be determined by the pace of recovery in the Queensland economy and interstate/overseas migration resuming.
It seems that a world-wide pandemic and the first recession in 30 years aren’t any match for Brisbane’s resilient property market. Lowest-ever interest rates, strong rental yields and a decrease in newly built apartment buildings provide a strong foundation for our local market rebound. Affordability and lifestyle have historically been the drawcard for interstate migration and investment and with this trend set to continue, the future is looking bright for Queensland’s sunny capital!