Place Advisory's Inner Brisbane Apartments report for the December 2016 quarter paints a picture of a market coming off its peak.

A total of 315 apartment sales were recorded in Inner Brisbane in the December 2016 quarter, a substantial decline from 1,293 sales recorded for the same period in 2015.

Total sales for 2016 were 2,149, back in line with the long-term ten-year average, and down from the record 5,366 recorded in 2015.

The year was hit by the Federal Election and uncertainty surrounding policy, problems that were compounded by higher construction costs, new lending policies for buyers, and stamp duty changes for foreign buyers.

The report also shows that the Brisbane apartment market is now operating in a much more competitive environment.

Just over $198.8 million worth of sales were recorded for the quarter, and the total gross value for the year was $$1.304 billion, compared with $3.194 billion in 2015.

Key figures

Source: Place Advisory.

The weighted average sale price for the quarter increased by 2.3% over the three month period to $631,270. The weighted average sale price for the year was $606,922, compared with $595,252 in 2015.

There were 71 projects in Inner Brisbane selling off-the-plan apartments in the December 2016 quarter, with only three being released during the most recent quarter, states the report. During the December quarter, Ella Apartments, Ferry Rd. and Maasra Apartments were released, adding 340 apartments to the market. Chester Apartments in Newstead was the top performer of the quarter, selling 70 apartments.

Two bedroom apartments represented 50% of sales for the period, followed by one bedroom apartments, and 11% of sales were of three-bedroom apartments. Studio apartments accounted for only 3% of sales.

Source: Place Advisory.

The report also looks to the year ahead, stating, "We expect that 2017 will be another challenging year."

Place makes seven predictions:

1. There will be fewer new projects.
2. Projects will be smaller.
3. Settlement risk for foreign buyers could continue to cause problems.
4. As credit tightens, innovative funding methods will emerge, for example, private lenders offering higher rates will enter the market.
5. Site sales will be strong as cash flow dries up.
6. It will be a buyers market.
7. As the owner-occupier market strengthens, two different markets could emerge in Brisbane.

Source: Place Advisory.

Click here to read Place Advisory's December quarter 2016 Inner Brisbane Apartments report.

See also:

How investors see the Brisbane property market

How does migration impact the Brisbane property market?

Sales soften in Brisbane's new unit market