Demand For Building In Brisbane Music To The Ears Of Construction Companies
While Brisbane has been seen as an under performing real estate market for several years, research predicts that property prices will hit an all-time high towards the end of the year (2014). Brisbane’s building industry booming means new opportunity for property developers to take their trade to a whole new level.
Property Market Increase Continues
News about Brisbane’s building industry booming trends is spreading like wildfire. Data from a number of property market researchers shows that overall property market in this city has grown in epic proportions and will continue to do so throughout 2014 and 2015. This has seen a number of property investors rush to the relatively under-valued city to take advantage of highly competitive prices.
Luxury apartments claim a lion’s share of this market
According to research firm Colliers International, the first quarter of 2014 saw a surge in luxury apartments in inner-Brisbane. Of the 591 new house sales examined across 47 projects, the research firm confirmed that 25% were luxury apartments.
Prices have risen dramatically
Meanwhile analysts from social and economic market research firm Urbis anticipate that at least 45 new mega-projects will be ready for sale by December this year. The research firm also reported that the average weighted price per apartment has risen dramatically from $128,000 early last year to $665,000 in 2014.
Here are the average national dwelling values for different cities across Australia.
- Darwin – 3.3%
- Brisbane – 2.9%
- Melbourne – 2.3%
- Canberra – 2.2%
(Source: Allan Wargent
Brisbane is defying historical trends
Historically, property prices in Australia do not follow a uniform pattern. That is why you find that some cities tend to outperform others at any given time. Brisbane is currently viewed as the next property hub by a growing number of investors. Urbis associate director Jon Rivera says “The current property boom is revolutionizing the Brisbane market transforming it from an otherwise sleepy town.”
What could be the reason behind this?
Luke O’Dwyer, a property markets expert from Silverstone Developments attributes the strong growth of Brisbane’s property market to the fact that the city is the most affordable property hub as compared to other cities that lie in the East coast. People from as far as Melbourne and Sydney are moving into Brisbane because of its highly competitive property prices.
This phenomenal rise in activity by property investors should see demand of the homes that are currently listed for sale gather new momentum towards the last quarter of this year. This will in turn an upward pressure on property prices in line with the basic demand and supply rules of economics.
Allan Wargent Property Buyers firm has predicted the following growth in property prices in different cities:
- Canberra – 1% to -4%
- Perth – 0% to 3%
- Melbourne – 2% to 5%
- Brisbane – 2% to 5%
Why property investors are moving to Brisbane
Affordability is not the only reason behind the drastic increase in demand for property in Brisbane. One factor that has been linked to this boom is the insurgence of a large number of property investors from outside Queensland. Most of these developers have achieved significant capital gains in their investment of the past few years and now they have the financial muscle to buy a large number of homes in the relatively affordable areas of Brisbane.
Apartments in high demand
According to Andrew Roubicek, director of residential for research firm Colliers, apartments in the $750,000+ price range have always been in high demand. Apartments listed at a $900,000 range contributed to 17% of the total sales made. Further research findings from Colliers indicate that property prices in Brisbane have shot by more than 25% above the five year average.
Predicting 2015 and Beyond
Going forward, pressure for property ownership in this city is expected to reach fever-pitch. But as usual with most property market (historically), this pressure is expected to reduce towards the last quarter of 2015. The exponential demand for property in this region is expected to soften in 2016 as predicted by BIS Shrapnel research institution.
Opportunities for construction companies
Brisbane is about to take off and recent research findings point to a much stronger growth over time. Terry Ryder, a renowned property commentator is confident that this property market is only gathering momentum and we’re yet to see much more growth. Construction companies are being advised to invest in property that falls within a market price range of $700 to $1000 because this is the bracket where most demand falls.
The recent trend in demand for construction in Brisbane provides a fantastic opportunity for property developers to cast their nets wide. This also seems to be the perfect time to invest in this market.