Brisbane renters are exploiting the more than 5200 new apartments built in the first nine months of the year to vacate suburbs between 5km and 15km from the central business district.
Vacancies in the middle suburbs jumped to 4.5 per cent, from 2.3 per cent in the last quarter, while unoccupied units within 5km of the city centre rose marginally from 3.4 per cent to 3.7 per cent, according to Real Estate Institute of Queensland figures.
REIQ spokeswoman Felicity Moore said it was a surprise to see the vacancy jump in the suburbs.
“We were expecting the inner ring to be where we saw that (higher) result,” Ms Moore said.
“We are expecting go see the inner rise in the next year.”
She said there were some large developments that added to the rental pool across the suburbs, and tipped a stabilisation in coming months.
The rollout of an expected 13,000 more apartments over the next 18 months in inner-city Brisbane, along with 16,000 more in Melbourne’s inner suburbs in two years, is being monitored by the Reserve Bank as the key areas for potential future oversupply.
In the apartment and construction hotspot of South Brisbane, the median rent for a two-bedroom apartment has remained $500 for three years. Another suburb in focus is Newstead, where the average rent fell $5 in the past year. Existing apartments are also offering deals including weeks of free rent to entice tenants.
Jenna and Derek Munkley moved into a two-bedroom unit with a 65sq m deck at the newly built Hopscotch Apartment building in Newstead in August, negotiating the advertised rent down from $650 to $570 a week.
For them, it was as much for a lifestyle change, with Ms Munkley, 31, now walking to work instead of commuting to her job at a bank in Newstead from the northern Brisbane suburb of Strathpine. “We looked at a lot of different units, and it’s definitely the renters’ market at the moment in this area,” she said.
In order to keep up sales and rents, developers are offering a range of incentives to get people into their apartments.
Increasingly, short-term rental guarantees of up to 5 per cent gross are being advertised, while others will throw in furniture packages, pay body corporate rates or shell out for furnishings.
A completed four-townhouse development in Morningside offered a Kia Picanto car to the first buyer to go unconditional. Ray White Bulimba agent Jared Candlin said the bonus car promotion was “a way to get people’s attention” in the crowded marketplace.
“They are a really good product, a very nice townhouse,” he said. “But with what is going on with the amount (of units) available, people might just miss them because they are looking at so many.”
Brisbane has come onto the Reserve Bank radar because of the concentrated geographical spread of the new apartments and the sheer number.
CoreLogic notes in a report to the bank that if the 49,000 apartments approved for development actually go ahead it will boost stock in the city by 25 per cent.
In Melbourne and Sydney, about 96,000 apartments have been approved but this is a relative increase of 16 per cent and 13 per cent respectively.
Property firm JLL reported 5169 units completed from January to September this year in Brisbane, with another 13,022 being built. Another 6422 are on the market.
It reported the median apartment price had fallen 1.2 per cent, counter to the five-year average of 1.1 per cent growth.
“Sales rates have reverted to normalised levels following a spike during 2025,” the Residential Commentary Brisbane Apartment Market report says.
Analysts and developers have pointed to the sharp decline in development and building approvals as a sign any oversupply will be short-lived.
The Australian Bureau of Statistics recorded a 28 per cent drop in monthly unit approvals to September and the yesterday the Housing Industry Association said apartment building was expected to fall 40 per cent by 2018-2019. Place Advisory estimates about 8000 apartments approved for development in Brisbane will not go ahead.
Resource : http://www.theaustralian.com.au/business/property/brisbane-apartments-renters-in-flight-to-quality-amid-unit-slump/news-story/3d9de0463a5a4b33578e35c797667607
