BUYERS looking for the upside in Brisbane’s apartment market can breathe a sigh of relief with the market expected to turn positive in 2019.
It’s a massive shift given the Queensland capital has previously endured some heavy tongue-lashing by experts, including Reserve Bank Governor Philip Lowe, thanks to the massive oversupply pipeline that built up off development applications from both domestic and international investors.
A flurry of buyers, mainly out of China, was the backbone behind the rise in developer interest in the city, and it wasn’t until the Chinese government began a crackdown on capital leaving their shores that the tap was slowly turned off.
Lenders were forced to also cut back on rampaging growth in investor lending for apartments after APRA decided that the sector was too hot for the future to handle.
The cooling has had a positive effect in Brisbane, with developers forced to put many of their plans on hold or sell off sites to others with the capital and patience to play the waiting game until the next housing pick-up.
It’s led to apartment market analysts having a serious rethink over the sector, with many now daring to believe that lenders will start revaluing units better than they have in the past two years.
The CoreLogic-Moody’s Analytics Australian Home Value Index Forecast, out last week, pegged Brisbane as now being in a situation where the worst was over.
The city endured a sorry few years of apartment data, last year posting negative growth of -2.9 per cent for units. But the numbers are turning now: 2018 was expected to see growth of 0.8 per cent, according to the report, with 2019 to wipe the doom and gloom away with a massive 6.5 per cent rise in unit values.
Only two parts of greater Brisbane were expected to see units in negative territory this year — Brisbane Inner City (-3.5 per cent) and Moreton Bay South (-3.3 per cent) — but even those once hard hit areas were expected to turn positive in 2019.
The inner city was expected to see unit growth of 6.1 per cent next year, with Moreton Bay South to post 5.9 per cent as the entire greater Brisbane apartment sector turns over a new leaf in 2019.
Moody’s Analytics believes 2019 would be the year for Brisbane apartments, with Moreton Bay North to see 8.7 per cent growth in unit value, Ipswich 8.1 per cent, Logan Beaudesert 8 per cent, Brisbane North 6.9 per cent, Brisbane West 5.3 per cent, Brisbane South 3.5 per cent, and Brisbane East 3.5 per cent.
The good news for buyers is that the turnaround won’t be immediate, giving first home buyers especially time enough to jump into the market.
Come 2020, Brisbane’s expected to not just lead growth across the country in terms of housing value growth, but also still hold median prices that make it much more affordable than southern capitals. That can only be a good thing.
Credit: News.com.au
