Could the Brisbane CBD market actually be in a state of undersupply?

 

While we may have read a lot about the Brisbane property market being in oversupply of late, seems we are not the only ones that feel this may just be all commentary hype. Some industry experts of late have been coming forth stating that marketing pundits have got it wrong and that the situation is in fact very much the opposite – the Brisbane CBD is showing all the signs of having a significant apartment undersupply. Could this be true?

 

Someone who believes this is certainly the case is Consolidated Properties Executive Chairman, Don O’Rorke. Over this two-part series we will explore some of the arguments that help back up O’Rorke’s case for the undersupply argument and we sure you will agree that he has quite a compelling case.

 

Okay, so let us rewind for just a moment – an undersupply here in Brisbane. Could that be true? Could what we have been reading over the last twelve months (and beyond) simply be fabricated stories to create newsworthy articles that sell papers and build hype?

According to O’Rorke, the answer is yes, and he has plenty of facts to back up his argument.

Let’s start with the first point – the ‘actual’ number of apartments that are currently under construction in the Brisbane CBD. After all, that is the only number we have to base anything on.

 

O’Rorke says his thoughts on undersupply are supported by Urbis; with the latest Urbis research showing that only 1812 units are under construction in the CBD across the following four projects –

  1. 150 apartments – Abian (Sunland Group, Alice Street, finishing in Q2 2017)
  2. 340 apartments - Spire (Consolidated Properties, 550 Queen Street, finishing in Q3 2017)
  3. 1,138 apartments - Sky Tower (Billbergia, 222 Margaret Street, progressively completing over two years to 2019, and 176 of those apartments will finish from Q2 2017)
  4. 184 apartments - Mary Lane (Sam Chong,111 Mary Street, finishing in Q2 2018)

From this Urbis data we can see that –

  •  666 units are due for completion this year (2017)
  •  810 units are due for completion next year (2018)
  •  336 units are due for completion in 2019

Knowing these numbers, does that sound like a city in a state of oversupply?

 

However, these four projects are just the tip of the iceberg. Next week in Part Two of this series we will explore other contributing factors - such as the pre-sales for these four projects, apartment vacancy rates in CBD, infrastructural developments, employment and where Brisbane sits in comparison to surrounding suburbs such as Fortitude Valley and Newstead. Some of the information is quite surprising.

  

In the meantime, we will leave you with this very strong statement from O’Rorke –

“The market will be crying out for new product in 2019. We certainly don’t see any oversupply issues in the CBD,” he said.

 

Undersupply or oversupply, one thing is for certain, when it comes to local Brisbane apartments you cannot go past speaking with the highly knowledgeable team at HSBP. For professional advice on your next move in the property market, schedule an appointment with the team at HSBP on 0419 782 133.

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