Brisbane OTP Oversupply or Not?

[UrbanPlanner]

this just came across my inbox so I thought I'd share as there seems to be some differing opinions about whether Brisbane is headed for an oversupply of inner city apartments. Interesting article.

"The findings of the report point to a continued undersupply of new off-the-plan stock in the inner city. Some commentators contend that a proposed pipeline of apartments will soon lead to an oversupply in the Brisbane market, but Place Advisory rejects this. It states that many of these projects are unlikely to make it to the open market, with bank lending hurdles ensuring that only feasible residential projects will make it as far as the construction phase. The undersupply of apartments, it says, is set to endure in the short term."

http://www.propertyoz.com.au/Article/NewsDetail.aspx?p=16&id=9545

 

[superAndrew]

Hi UrbanPlanner

what is your opinion?

I know of some developments, in Bowen Hills and Brisbane city surrounding area, where 80% has already been pre-sold to asian investors.

Andrew

 

[dilberto]

Err.. Place Projects are property developers.

Builders & sellers of OTP property publishing reports saying that there isn't an oversupply of OTP property & that they are still a good buy.

The vested interest is strong in this one...

 

[HeadsOnBeds]

There are suddenly a lot of cranes in the sky around the valley, Bowen hills and Newstead, but there hasn't been much in the previous 5 years so I think it will get sucked up without to much oversupply.

The rental demand still seems strong so that should help. Some of the very expensive riverfront apartments seem to have nearly recovered to pre GFC prices as well.

 

[UrbanPlanner]

Hi UrbanPlanner

what is your opinion?

I know of some developments, in Bowen Hills and Brisbane city surrounding area, where 80% has already been pre-sold to asian investors.

Andrew

Hi Andrew

I haven't researched that market a great deal so my opinion comes with a grain of salt, but based on the massive number of emails I receive marketing OTP purchases in the CBD, perhaps Brisbane is headed for an oversupply in the CBD.

I spent some time in Brisbane last year when we were looking for an IP (house) and one interesting observation was that there appears to be a much greater market take up of apartments in inner-middle suburbs as compared to Perth. There were heaps of 6-8 pack apartment buildings in nearly every suburb i spent time in - Chermside, Stafford, Kedron, Wavell Heights, Zillmere (12km from CBD).

 

[superAndrew]

Hi Andrew

I haven't researched that market a great deal so my opinion comes with a grain of salt, but based on the massive number of emails I receive marketing OTP purchases in the CBD, perhaps Brisbane is headed for an oversupply in the CBD.

I spent some time in Brisbane last year when we were looking for an IP (house) and one interesting observation was that there appears to be a much greater market take up of apartments in inner-middle suburbs as compared to Perth. There were heaps of 6-8 pack apartment buildings in nearly every suburb i spent time in - Chermside, Stafford, Kedron, Wavell Heights, Zillmere (12km from CBD).

Am with you on this one.

I'd definitely stay away from Suburbs like Bowen Hills, South Bank and West End and especially from those apartments that come with a rental guarantees. We all know that it's build on top of the purchase price which in turn inflates the market price.

Asian investors do love them though.

I also don't like some projects in Chermside. Some tiny 2 bedrooms are going for $595,000

 

[RPI]

It can come down to the individual development in an area. I have seen re-sales in Bowen Hills that have not achieved their original OTP sale price of a couple of years earlier.

Short term OTP and then sell prior to settlement can work in a hot market.

I am still a big believer in supply in demand and if you have 500 apartments in the one complex the chance that someone wants to re-sell the same time as you is pretty high when compared to something in a block of 4 townhouses.

 

[superAndrew]

I am still a big believer in supply in demand and if you have 500 apartments in the one complex the chance that someone wants to re-sell the same time as you is pretty high when compared to something in a block of 4 townhouses.

That's so tru. Same goes to renting. You will always be competing in price.

 

[Claire90]

See this article about new supply in all capital cities.

http://www.propertyobserver.com.au/...pelines-a-state-by-state-rundown.html?start=2

I was looking to invest in Brisbane, but I?m having second thoughts after reading this and a Residex report predicting only 4% CG in Bris apartments in the next 8 years.

I wasn?t looking to invest in the oversupplied areas, but, I?m wondering how this and slow economic growth will impact Brisbane City as a whole.

 

[Deltaberry]

Too much in too short a time. Stay away

 

[hugh72]

See this article about new supply in all capital cities.

http://www.propertyobserver.com.au/...pelines-a-state-by-state-rundown.html?start=2

I was looking to invest in Brisbane, but I?m having second thoughts after reading this and a Residex report predicting only 4% CG in Bris apartments in the next 8 years.

I wasn?t looking to invest in the oversupplied areas, but, I?m wondering how this and slow economic growth will impact Brisbane City as a whole.

Inner city-CBD apartment market oversupply has been flagged for some time, why not look for a house slightly further out? Then you are most likely purchasing a property appealing to a different demographic and market IMO