27 17 CBD. 27 Pure 28 Pinnacle 29 Night Edge

Transcription

1 MARKET REPORT Inner Brisbane Apartments September Quarter 2016

2 25 NORTH OF THE RIVER CBD SOUTH OF THE RIVER CBD 1 The Midtown Quay Apartments 3 Mary Lane 4 Skytower NORTH OF THE RIVER 5 The Baxter Apartments 6 The 28 7 Landmark 8 Mode 9 Pier at Waterfront 10 The Yards 11 Proximity 12 Hercules 13 Illumina 14 Savoir Faire Residences High Street 16 Utopia Space 17 The Johnson 18 Henley Towers 19 White Dawn 20 Newstead Central 21 Aura 22 Belise 23 Gallery House 24 The Winn 25 The Hudson at The Mill 26 Chester Apartments 27 Pure 28 Pinnacle 29 Night Edge SOUTH OF THE RIVER 30 Empire 31 The Duke 32 Linton Apartments 33 Olympia on Russell 34 Brisbane Casino Towers 35 Southpoint 36 Light & Co 37 Spice 38 Affinity 39 Citro 40 The Mews 41 Basse 42 Ink 43 Lincoln on the Park 44 Linc 45 Virtuoso 46 Orion 47 Atlas 48 Allure Apartments 49 The Establishent 50 Habitat 51 St Julien Residences 52 Oxley & Stirling 53 Princess Regent 54 Oxy 55 Stone & Co 56 Black Fold 57 Boggo Road Stage 2 58 Brisbane 1 59 Skyneedle 60 Soko Waterfront 61 Cedar 62 Corde Residences 63 Lume 64 The Marc 65 Florence 66 Stoneham 67 Eastpark

3 1 OVERVIEW Buyers continue to demand value and quality in the Brisbane apartment market. However, Place Advisory expects that Inner Brisbane s apartment market will remain challenging for some larger scale projects. $900,000 - $1.2m $1.2m+ Other strong performers include Chester Apartments in Newstead and Gallery House in Hamilton, recording 67 and 55 unconditional transactions respectively. $750,000 - $900,000 $650,000 - $750,000 $550,000 - $650,000 14% 26% 1% 2% 8% SALES BY PRICE POINT SEPTEMBER QTR 2016 The Inner Brisbane apartment market has undergone a significant transformation over the past six months. Off the plan sales momentum has softened across the market influencing the results recorded in the September 2016 Quarter. However, despite overall market sentiment, the Inner Brisbane apartment market still recorded a total of 542 unconditional transactions during the September 2016 quarter, in line with long term, ten year averages. This is a 17% increase from the June quarter s sales results, but still a shade on September 2015 with a 61% softening through the past 12 months. The weighted average sale price recovered, increasing by 5% over the three month period to $617,297. As Inner Brisbane adjusts to the next property cycle, Place Advisory expects these levels of transactions to remain consistent in the short term. Place Advisory has summarised the sales results for the September 2016 quarter in the following points. 22% SUMMARY OF THE SEPTEMBER 2016 QUARTER Inner Brisbane s off the plan apartment market recorded 542 unconditional transactions over the September 2016 quarter, totalling almost $335 million worth of apartment sales. There are currently 71 projects being sold off the plan within the precinct, six of which were released during the September quarter. These projects, which included Gallery House, Chester Apartments, The 28, Aura, The Mews and Oxy, added an additional 755 apartments to the market. A weighted average sale price of $617,297 was recorded, an increase of 5% from the June 2016 quarter. This is indicative of a slight change in product mix across the market, resulting in higher sale prices. The Mews, located in Woolloongabba, was the top performer for the quarter, recording 110 unconditional transactions. 27% $350,000 to $450,000 $450,000 - $550,000 Two bedroom apartments accounted for the majority of unconditional transactions, representing 57% of sales for the period. This was followed by one bedroom apartments, accounting for 37% of transactions. Three bedroom apartment sales represented just 4% of transactions, whilst the remaining 2% of total sales were sub-penthouse and penthouse apartments. The majority of transactions that occurred during the September quarter were priced between $450,000 and $550,000, representing 27% of sales. This was closely followed by the $550,000 to $650,000 price bracket, accounting for 26% of transactions. A further 22% of total sales occurred within the $350,000 to $450,000 price bracket. Once again, the South of the River precinct saw the highest number of off the plan apartment sales, achieving 282 unconditional transactions. The North of the River precinct recorded a further 212 sales, whilst the Brisbane CBD saw just 48 unconditional apartment transactions occur. Buyers continue to demand value and quality in the Brisbane apartment market. As apartment supply stabilises and demand for well appointed and well located apartments with a high level of amenity strengthens, we will see two very different apartment markets begin to materialise. Higher end owner occupier apartments will separate themselves from the wider market, and although sales will occur at a slower overall rate, this will create a different style of purchaser and end user, adding an extra dimension to the Brisbane market. Place Advisory expects that Inner Brisbane s apartment market will remain challenging for some larger scale projects. The market recalibration will create similar sales results as seen through the past six months. It must however be reiterated, that although these levels of sales are considerably lower than volumes recorded 12 months ago, they are in line with the long term ten year average. For a more detailed review on Inner Brisbane s future development pipeline, please turn to Section 5. PENTHOUSE/SUB-PENTHOUSE THREE BED TWO BED 52% 14% 2% REMAINING FOR SALE SEPTEMBER QTR % ONE BED

4 2 CBD The Brisbane CBD recorded 48 unconditional transactions across four separate projects, totalling almost $30 million worth of apartment sales. Off the plan apartment sales in the Brisbane CBD doubled during the September 2016 quarter, recording 48 unconditional transactions. With no new projects being released throughout the quarter, the CBD precinct continues to sell down available stock. A weighted average sale price of $612,500 was recorded for the quarter, a softening of 26% from the previous quarter. This represents an increase in the levels of cheaper investment stock that transacted during the period. Skytower recorded the highest levels of unconditional transactions across the CBD market during the September 2016 quarter, recording a total of 37 sales. The majority of transactions that occurred within the CBD precinct were in one bedroom configurations, accounting for 71% of total sales. Two bedroom configurations represented 19% of transactions, whilst three bedroom configurations made up the remaining 10%. Just 323 out of 1,544 off the plan apartments remain for sale across the Brisbane CBD s four projects, which include The Midtown, 111 Quay Apartments, Skytower and Mary Lane. The majority of remaining stock for sale over these four developments is made up of two bedroom apartments, accounting for 42%. This is followed by one and three bedroom configurations, each representing 27% of available stock. Sub-penthouses and penthouse apartments make up the remaining 4%. The Brisbane CBD remains to be the most limited precinct in terms of new projects, buying opportunities and residential supply. 48 unconditional transactions; weighted average price $612,500 Development Suburb Status Total Units Sold to Date Available for Sale Sold September 2016 Qtr The Midtown CBD Completed Quay Apartments CBD Completed Skytower CBD Under Construction 1, Mary Lane CBD Under Construction CBD PRECINCT TOTALS 1,544 1,

5 3 NORTH OF THE RIVER The North of the River off the plan apartment market, which spans 27 actively selling projects, recorded 212 unconditional apartment sales for the September 2016 quarter. This reflects a slight decline in comparison to the June quarter, which recorded 219 transactions. A high weighted average sale price of $702,476 was recorded for the quarter, reflecting 18.8% price growth over the previous quarter. This is the strongest weighted average price across Inner Brisbane s off the plan apartment market, indicating the precinct saw higher end transactions occur throughout the period. The North of the River precinct recorded a high number of two bedroom transactions, representing 58% of total sales for the quarter. This was followed by one bedroom apartments, accounting for 37% of total transactions. Three bedroom apartments represented 3% of transactions, whilst the remaining 2% were sub-penthouse and penthouse apartments. The North of the River precinct saw four projects enter the sales cycle. These include Gallery House, Chester Apartments, The 28 and Aura. Chester apartments, located in Newstead and Gallery House, located in Hamilton, recorded the highest number of transactions for the quarter, recording 67 and 55 unconditional sales respectively. 860 out of 4,321 apartments currently remain for sale across the precinct. Of these apartments which remain for sale, 51% are in two bedroom configurations, followed by one bedroom configurations, accounting for 36% of remaining stock. A further 11% are in three bedroom configurations, whilst the remaining 2% of stock are sub-penthouse and penthouse apartments. Pinnacle Apartments have now sold out and will be removed from future reports. Development Suburb Status Total Units Sold to Date Available for Sale Sold September 2016 Qtr Pier at Waterfront Newstead Completed Belise Bowen Hills Under Construction The Hudson at The Mill Albion Under Construction Pinnacle Apartments Hamilton Completed Proximity Hamilton Under Construction North Yards Bowen Hills Under Construction South Yards Bowen Hills Under Construction Newstead Central - Laguna Newstead Under Construction Newstead Central - St Tropez Newstead Under Construction Newstead Central - Capri Newstead Under Construction Mode Newstead Under Construction Hercules Hamilton Under Construction Pure Spring Hill Under Construction The Johnson Spring Hill Completed Baxter St Apartments Fortitude Valley Under Construction Henley Towers Fortitude Valley Awaiting Construction Utopia Space Fortitude Valley Awaiting Construction The Winn Fortitude Valley Under Construction High St Toowong Under Construction Savoir Faire Residences II Milton Under Construction Landmark Toowong Under Construction White Dawn Toowong Awaiting Construction Illumina Toowong Under Construction Gallery House - Stage 1 Hamilton Awaiting Construction Chester Apartments Newstead Awaiting Construction The 28 Fortitude Valley Awaiting Construction Aura Milton Awaiting Construction NORTH OF THE RIVER TOTALS 4,321 3, unconditional transactions; weighted average price $702,476

6 4 SOUTH OF THE RIVER The South of the River apartment market was the strongest selling precinct during the September 2016 quarter, representing 52% of Inner Brisbane s off the plan apartment sales for the period. 282 unconditional transactions were recorded across 40 projects. This reflects 28% growth in sales volumes over the previous three month period. A weighted average sale price of $554,078 was recorded for the September 2016 quarter, reflecting very little change from the June 2016 quarter previously. The South of the River precinct saw a high number of two bedroom transactions, totalling 63% of the period s sales. This was followed by one bedroom configurations, accounting for 32% of the quarter s transactions, whilst the remaining 5% of transactions were three bedroom apartments. September 2016 saw just two new projects enter the sales cycle in the South of the River precinct. These include The Mews, located in Woolloongabba and Oxy, located in Greenslopes. The Mews, developed by Pellicano, was the top performing project for the September 2016 quarter, recording a total of 110 unconditional transactions. As at 30 September 2016, 1,251 out of 5,030 remained for sale across the precinct. The majority of remaining apartments are in two bedroom configurations, representing 55% of stock. This is followed by one bedroom configurations, accounting for a further 31%. Three bedroom apartments account for just 13%, whilst sub-penthouse and penthouse configurations represent 1% of available apartment stock. Two projects have now sold out and will be removed from future reports. These include Orion and Stone & Co. Development Suburb Status Total Units Sold to Date Available for Sale Sold September 2016 Qtr Emporium Residences & Emporium Apartments South Brisbane Under Construction Southpoint - The Apartments South Brisbane Under Construction Basse South Brisbane Completed Habitat West End Under Construction Spice Apartments South Brisbane Completed Citro West End Under Construction Light & Co - Radiance West End Completed Light & Co - Illuminate West End Completed INK West End Under Construction Olympia on Russell South Brisbane Under Construction Brisbane Casino Towers South Brisbane Under Construction Virtuoso West End Awaiting Construction St Julien Residences South Brisbane Awaiting Construction Black Fold West End Under Construction Oxley and Stirling South Brisbane Under Construction Brisbane 1 South Brisbane Awaiting Construction Skyneedle Stage 1 South Brisbane Awaiting Construction Empire Woolloongabba Completed Princess Regent Woolloongabba Under Construction Atlas South Brisbane Awaiting Construction Soko Waterfront Apartments West End Under Construction Allure Apartments West End Under Construction Linc Kangaroo Point Completed Affinity Kangaroo Point Completed Orion Coorparoo Completed Stone & Co Greenslopes Under Construction The Establishment Kangaroo Point Under Construction Cedar Greenslopes Under Construction Corde Residences East Brisbane Under Construction Lume Kangaroo Point Awaiting Construction The Marc Kangaroo Point Under Construction Boggo Road Stage 2 Dutton Park Awaiting Construction Linton Apartments Kangaroo Point Under Construction Lincoln on the Park Greenslopes Under Construction The Duke Kangaroo Point Under Construction Eastpark (Stage 1) Bulimba Under Construction Stoneham Greenslopes Awaiting Construction Florence Greenslopes Awaiting Construction The Mews Woolloongabba Awaiting Construction Oxy Greenslopes Awaiting Construction SOUTH OF THE RIVER TOTALS 5,030 3,779 1,

7 5 SITE SALES AND FUTURE PIPELINE Place Advisory has analysed all residential development applications within the Inner Brisbane precinct with a development value over $10 million or which contain greater than 30 apartments. The following points summarise the approval changes for Inner Brisbane apartment sites over the September 2016 quarter. Brisbane s Inner Ring projects have been categorised by their various stages of planning. These stages include development application, development approval and deferred projects. The September 2016 quarter saw Inner Brisbane s apartment pipeline increase by 5.9%, bringing the total fi gure to approximately 24,633 apartments across 111 projects. These projects are currently in the planning stages and the likelihood of all 111 projects making it into the market place at the same rate as seen in previous years is expected to soften. The September 2016 quarter recorded similar results in all stages of the development pipeline as seen in the June 2016 quarter. With a large number of projects entering the sales cycle, the total number of approved apartments, not currently under construction or being actively sold, now totals approximately 41% of all apartments planned in Inner Brisbane s development pipeline. However, when compared to the corresponding period 12 months prior, the development pipeline has changed dramatically. Development Applications to the Brisbane City Council have declined by 15% over the past 12 month period, currently accounting for just 26% of the total pipeline. Meanwhile, deferred projects have increased substantially. Over the past 12 month period, deferred projects have increased from 19% in the September 2015 quarter to 33% in the September 2016 quarter. This increase in the number of deferred projects over the past 12 months can be attributed to various changing economic conditions. These include tighter lending policies for both developers and purchasers, higher construction prices, softening sales rates and restrictive policies for foreign investors. The majority of apartment stock in Inner Brisbane s development pipeline is in two bedroom confi gurations, accounting for 50% of total stock. This is closely followed by one bedroom confi gurations, representing 44% of stock. Three bedroom apartment confi gurations account for just 6% of total stock in Inner Brisbane s apartment pipeline. The South of the River precinct retains the majority of planned apartments across Inner Brisbane, totalling 10,291 potential apartments. These apartments remain centred predominately around South Brisbane, Woolloongabba and West End. FUTURE SUPPLY PIPELINE - Stock Type % 1 BED 2 BED 3 BED Prepared by Place Advisory. Source BCI Construction. FUTURE SUPPLY PIPELINE - Stage of Development % APPLICATION APPROVED DEFERRED Prepared by Place Advisory. Source BCI Construction. Inner Brisbane s development pipeline has changed dramatically over the past 12 months

8 6 SPECIAL REPORT New vs Old - Inner Brisbane s Apartment Resales Place Advisory s annual report on Inner Brisbane s apartment resales provides insight into how each market has performed over the past ten years. By separating each apartment sale into two categories, new or old, we can determine how they have performed and which is the better investment. An apartment resale is defi ned as a sale that occurs after the initial sale of an apartment within a development. Place Advisory has analysed Inner Brisbane s new and resold apartments over the past ten years and we have summarised our fi ndings in the following points. As shown in the graph below, the most recent six month period ending June 2016 saw resold apartments record a median sale price of $445,000, whereas new apartments recorded a median sale price of $535,000. Over the past ten years ending June 2016, apartments that have been resold in Inner Brisbane have been, on average, 17% more affordable than new apartments. Price growth for resold apartments has outpaced that of new apartments, with resold apartments experiencing 4.0% price growth per annum over the past ten years, whereas new apartments have experienced 3.1% price growth per annum. Over the past fi ve years, with the exception of the most recent 12 month period, the ratio of old to new apartment sales in Inner Brisbane have been relatively similar. This is due to the record levels of off the plan apartment stock available. The most recent 12 month period ending June 2016 has seen new apartment sales decrease considerably as a result of numerous infl uential issues across the wider economic market. INNER BRISBANE APARTMENTS: RESALES VS NEW TRANSACTIONS $700,000 Resale Number of Sales New Number of Sales 4,000 $600,000 $500,000 Resale Median Sale Price New Median Sale Price 3,500 $535,000 3,000 $445,000 2,500 Median Sale Price $400,000 $300,000 2,000 1,500 Number of Sales $200,000 1,000 $100, $ Period Prepared by Place Advisory. Source RP Data

9 Top Resale Performers - Past 12 Months It is widely known that the Inner Brisbane property market has softened since the GFC. Average capital growth peaked at 10.5% during the six month period ending June Capital growth has since experienced several consecutive periods of decline, reaching a low point during the June 2016 six month period at 2.6%. Over the past ten years, average capital growth has been recorded at 5.6% per annum. The table on the right summarises the top ten suburbs within Brisbane s Inner Ring that have achieved the strongest capital growth for resales over the past 12 month period ending June Located on the Brisbane River and just 3.5 kilometres from the Brisbane CBD, New Farm has outperformed the wider market and has achieved the highest average capital growth of 5.6% over the past 12 months. Highgate Hill and Hawthorne also achieved high capital growth, averaging 5.0% and 4.9% price growth respectively. TOP TEN SUBURBS PAST 12 MONTHS Suburb Capital Growth 1. New Farm 5.6% 2. Highgate Hill 5.0% 3. Hawthorne 4.9% 4. Coorparoo 4.4% 5. Herston 4.2% 6. Auchenfl ower 4.0% 7. Paddington 3.9% 8. Greenslopes 3.7% 9. East Brisbane 3.6% 10. Newstead 3.6% Prepared by Place Advisory. Source RP Data TOP SUBURB FOR CAPITAL GROWTH NEW FARM 5.6% TOP SUBURB FOR MEDIAN PRICE NEWSTEAD $853,500 TOP SUBURB FOR HOLDING PERIOD ST LUCIA 11 Years TOP BUILDING FOR CAPITAL GROWTH THE PAVILION ON BROOKES 21.1% TOP BUILDING FOR MEDIAN PRICE CUTTERS LANDING $2,315,000 TOP BUILDING FOR HOLDING PERIOD ST LUCIA GARDENS 17.6 Years TOP HIGH-RISE BUILDING FOR CAPITAL GROWTH ADMIRALTY QUAYS 8.2% TOP MID-RISE BUILDING FOR CAPITAL GROWTH THE PAVILION ON BROOKES 21.1% TOP LOW-RISE BUILDING FOR CAPITAL GROWTH GIGI LODGE 11.8%

10 An intimate knowledge of potential buyers and the marketplace can minimise risk and give your development the edge over competitors. At Place Projects, we understand the importance of ongoing market research. In fact, we have our own full-time researchers, so we re able to retain and have easy access to all of the information we gather. We know that by providing our clients with accurate, up-to-date research, it ensures they can make informed, fi nancially sound business decisions. It enables us to identify opportunities for our clients, provide advice on choosing the very best site and create the optimal package for each project. We can then make qualifi ed recommendations on the product mix, positioning, design, fi nishes and even price. Access to such comprehensive buyer information also helps us pick early market trends. We believe that our in-depth local market knowledge can help you develop a product that will yield greater returns, experience faster sales and achieve the best fi nancial result.

11 The Place Project Marketing Team is led by some of the most experienced and high achieving sales consultants in the industry. LACHLAN WALKER As a Place Researcher, Lachlan s role is to gather both internal and external market intelligence to gain a comprehensive understanding of residential projects and provide product specifi c advice to our clients. This reduces the associated risk and provides the information necessary for them to make an informed decision. He has worked closely with a number of developers, from site conception through to product delivery. Lachlan has also provided professional consultancy and advisory services to leading property clients, including Valad Property Group, Lend Lease, Australand, Stockland, Laing O Rourke, Kenlynn Properties Australia, Anthony John Group, FKP, Leighton Properties and Devine. Lachlan Walker M: E: lachlanwalker@eplace.com.au BRUCE GODDARD Bruce Goddard has a reputation as a prominent leader in the fi eld of Residential Project Marketing, which has led to numerous major appointments for some of Australia s most prominent institutions and banks. As licensee of Place Projects, Place now holds appointments for a number of Brisbane s major residential projects, supplying advisory, sales and marketing services to various Public as well as smaller Private Companies. Often sought after by property developers through reputation, Bruce s offi ces have been involved in the setting, marketing and selling of numerous residential projects. Bruce was also recognised by the REIQ as Queensland s Agent of the Year in Bruce s Project Marketing career spanning over 25 years has resulted in sales in excess of $1 Billion dollars. Bruce Goddard M: E: brucegoddard@eplace.com.au SYD WALKER After a successful career in marketing rural commodities, Syd moved into Real Estate and Project Marketing on the Sunshine Coast in 1992 before a move to Brisbane in Over a 20 year period Syd has been involved in site acquisitions, project consultancy and the sale of a number of landmark residential and mixed use buildings. During this period his agency has won the prestigious REIQ Sunshine Coast Real Estate agency of the year, seen his staff take out awards for REIQ salesperson of the year and the Sunshine Coast business employee of the year. At Place Projects Syd is responsible for managing project sales teams, identifying new project opportunities and servicing various investment channels throughout Australia. Syd works closely with the management team in project marketing to meet developers required rates of sale and the overarching project objectives. Syd Walker M: E: sydwalker@eplace.com.au

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