Brisbane's new apartment market is coming down from the peak of 2015 but sales continue to track above long term averages.

The inner Brisbane apartment market recorded a total of 828 unconditional transactions in the March quarter, down 36 per cent from 1,293 sales in the December quarter which capped off an historic year for the city’s off-the-plan market. The March period recorded a weighted average sale price of $602,415, reflecting a softening of two per cent on last quarter’s weighted average. It tracks above the city’s five-year average of 728 sales per quarter at an average price of $569,500.

The off-the-plan market is changing and developers need to adapt to shifting trends. The Brisbane off-the-plan apartment market has benefited from high demand in recent years, but we are moving into a new property cycle. We have already witnessed a defined shift from what has been an investor driven market back towards the owner occupier market. There is no doubt this year will be tougher than 2015 due to a variety of factors including new lending policies for purchasers and developers, the federal election and higher construction prices. With that said, it is likely sales rates will continue to track above long term averages. 

There was a total of $499 million in unconditional off-the-plan sales in the March quarter. Two bedroom apartments accounted for 52 per cent of total sales for the March 2016 quarter, while one bedroom apartments totalled 41 per cent of sales. The majority of transactions for the first quarter of 2016 were recorded between $450,000 and $550,000, accounting for 33 per cent of total transactions. A further 23 per cent of the quarter’s sales occurred between the $550,000 and $650,000 price point. Brisbane 1 in South Brisbane was the top performer for the first quarter of 2016 with a total of 99 unconditional sales.

Other strong sellers included Mary Lane in the CBD (79 sales) and Newstead Central’s Capri Tower (43 sales). The South of the River precinct recorded the majority of apartment sales for the March 2016 quarter, achieving 511 unconditional sales. The North of the River precinct recorded 211 unconditional sales, while the Brisbane CBD recorded 106 sales.

The report states 71 apartment projects are currently being sold off the plan across the inner Brisbane market. Overall, two-bedroom apartments account for the majority of current supply, representing 45 per cent of all remaining apartments currently on the market. At the end of the March 2016 quarter, there were 2,424 apartments remaining for sale across the inner Brisbane market, equating to a supply of nine months.

In total, the potential residential development pipeline now sits at approximately 20,456 apartments over 100 projects. This reflects a softening of 2.6 percent over the previous quarter, primarily due to a number of projects entering the sales cycle during the March 2016 quarter. Tighter lending conditions and rising construction costs would be key issues in the delivery of this pipeline.