Brisbane's apartment and unit market is gradually recovering after an investor boom saw a glut in construction.
Photo: AAP/Darren England
Brisbane’s unit market is “like a snake that’s swallowed a possum” still trying to cope after an unprecedented construction boom, one expert says.
As a consequence, developers are thinking differently about the market, in terms of both what they are building and why.
At a residential property summit held by The Urban Developer in Fortitude Valley on Friday, experts in the retail sector noted how quickly Brisbane had grown up from being a “country town” to a metropolitan space with high inner-city living demand.
“I think probably the simplest way to describe it is the market is like a snake that’s swallowed a possum, and it’s just digesting it for a period of time,” Colliers International residential director Andrew Scriven said.
Mr Scriven said the city had seen “unprecedented” sales several years ago - upwards of 8000 a year - but that rate was rapidly declining. The market was trying to right itself, or “taking a breather”, he said.
“Before we went through this transformational change in the marketplace in terms of investor stock and inner-city living … the Brisbane apartment market was somewhere doing between 1500 and 2000 sales a year.
“Obviously it changed ... inner-city living became a norm, town plans changed to allow for high density and we were able to … import buyers, and we did it exceptionally well.”
Mr Scriven said the “imported” buyers helped change the market but sales were softening and the number of projects being developed had dropped.
“There’s just a little bit of indigestion, so things are working their way out,” he said.
He said while the market was often being referred to as a different market, it was in fact simply returning to the pre-investor-boom market of the early 2010s, with projects still successfully completed.
Despite the hiccups, Brisbane’s situation was positive compared to the southern markets, with growth continuing and interest from interstate continuing, he said.
Cue Property Settlements director Leah Kent described the market as “very challenging” with a “trend of extremes”.
“Projects that have massive shortfalls is one extreme, and that can be anywhere from high price points to neighbouring comparable sales, which is obviously a massive factor when it comes to valuation results,” she said.
“I’ve never seen so many projects that have been successful, and there’s been a real opportunity there for developers to do well.”
Ms Kent noted a similar trend highlighted by other experts at the summit: high value and high quality apartment developments were selling better in Brisbane than lower quality.
As the glut of units left Brisbane’s market in recovery, the focus shifted from quantity to quality, and from investors to owner-occupiers.
Architect and Cottee Parker director Sandra Browne said she was increasingly being called in as part of marketing campaigns to sell high-end apartments to baby boomers with demanding standards.
But wasn't just wealthy retirees are turning back to apartments but families as well.
Instead of owning and maintaining a large house, Ms Browne said some families with children were increasingly turning to apartment living as a more cost-effective and comfortable lifestyle.
The difference was their requirements for a high-end experience.
“It’s fair to say that the amenities have come a long way in the past few years,” Ms Browne said.
“It’s no longer good enough to put in a pool and a gym, you’ve really got to put in a lot more than that at this end of the market.”
Instead, she said, the amenities needed to go beyond retail spaces or open space to such specialised items as firepits, yoga lawns and even wine cellars.
"That was a real conversation starter for that particular project. The agent told me everybody wanted to know about the firepit," she said.
“I think there’s a real emphasis on wellness, so places you can roll your mat out on the rooftop and do a bit of yoga, steam rooms, that sort of thing.
“We’re seeing that is the trend now, the wellness trend.”
Ms Browne said features such as private dining were becoming a standard in high-end properties designed to attract the cashed-up owner occupier.
Source: The Age by Lucy Stone