This was a year for the investors, and 2015 promises much the same, writes David Aubrey.
Next year, 2015, promises to be the first year that Brisbane starts to catch up Sydney and Melbourne following stellar sales in 2014.
The Brisbane new apartment market has had a solid year and according to Place Advisory there were several record setting sales quarterly totals throughout the year.
Leading locally-based large scale developers such as Metro and Pradella report record years while newcomers such as Melbourne-based Gurner have added a successful new dimension to the Brisbane market by importing architectectural ideologies from afar which the market has embraced, resulting in record volume off-the-plan sales.
While 2014 has set sales records it has not set any price growth data on which to hang a headline or two.
Brisbane has historically played catch-up in terms of price growth with Sydney and Melbourne and has never failed to deliver over several property cycles.
Property commentator BIS Shrapnel predicted Brisbane to be the strongest property performer over the next three years. Their national Residential Property Prospects Report forecast a 17 per cent increase in Brisbane median prices.
“The pieces are falling into place for the Brisbane residential market to continue to strengthen,” says report author Angie Zigomanis.
Zigomanis is talking about the Brisbane market on a macro level and not just about the headline apartment sales reported in newspapers.
While cranes on the inner city skyline make the news, the spread of apartment living is rapidly moving outwards to the suburbs to provide choice for local residents who do not wish to live in an inner-city high rise.
Property commentator Terry Ryder notes “a standard pattern in property cycles is that an upward movement starts in the top end suburbs and gradually moves out to the middle and outer ring suburbs.”
This can be clearly seen in Brisbane with the emergence of major apartment projects in suburbs such as Coorparoo, Toowong, Chermside and Upper Mount Gravatt, to name a few.
Place Advisory recognises a gap in the market for affordable three-bedroom apartments that can only be met in the middle and outer-ring suburbs.
Three-bed apartments have become a rare commodity in the inner city due to affordability yet in the middle-ring, developers are selling family-sized apartments for less than a renovated three-bedroom house in the same suburb.
2014 was a year for the investors to take advantage of Brisbane’s low prices and within a low interest environment. And take advantage they did and in record numbers. Yet the much chased capital growth barely kept pace with CPI.
2015 is set to continue in a low interest environment and investors will continue to buy, and there will be fundamental few changes.
The main economic forecasters such as BIS Shrapnel predict the price increases not yet seen and local owner occupiers are returning to the market in droves.
That creates a different dynamic for Brisbane and one which creates a great environment in which to buy.