QLD Where is the Brisbane apartment oversupply?

And I completely agree with Ms Ali. Just there, you're on the congested road out of town. If you absolutely MUST buy something in the area now then I wouldn't look anywhere other than Harris Park for these 3 main reasons:
1/ There are still lots of old, well-built and unrenovated units which you can repaint and retile cheaply and tastefully.
2/ Harris Park is a stone's throw from Parramatta. It has it's own train station where all trains now stop but you could easily walk the extra 5 mins to Parra Station if you were compelled to do so. 10 mins walk to Westfields.
3/ It's still the poorer cousin of the surrounding suburbs but is arguably closer, quieter and nicer. Therefore, more CG possible to 'catch up' to North Parra and Westmead.

In fact, I think you'd have a snow flake's chance in hell of buying something there now. If you really need to, then look up Jacque - the buyers agent. I imagine that every decent deal is being forwarded to her before it shows up on realestate.com. If you want to play in a hot market, you'll need a helping hand, I'd say.
Otherwise, wait a few years. I'm really glad I've got a unit there. No way would I buy there now.
Having said all this, your yield will not be good at all for a long time. (But probably still better than anywhere else in Sydney).

Sorry to do a Sydney post on a Brisbane thread.
I too am interested in these 1960s flats. Thanks for the links VB. But some of them look like they could easily get spillover from the river on a bad day?

 

I don't think it is a simple matter of looking at the amount of development, although clearly that increases the risk of over supply. I also think that looking at supply is only part of the picture as obviously if the demand is there the stock will be absorbed. I personally find it quite difficult to take any one metric and then brand an area on that basis. I'll give an example, some commentators believe that a history of strong population growth in an area is an indicator of good potential for rental yields and CG. But does this mean an area that has been static has poor potential? What does population growth mean for the sort of property you are considering? Is it families or singles, is it professionals or fly in fly out workers, is it younger people or older people? All these should be considered not just growth in isolation.

My point is that just looking at one number / factor is too simplistic and believing what journalists write on the topic without understanding where their interests lie is poor due diligence in my view.

 

Yes, @sash you are right. that's why I'm glad I can gain some knowledge here in SS/PC forum.

 

@CosmicTrevor : So yes, where can we get those data / statistics from ?

@WattleIdo : many thanks for the suggestion and the sharing mate, I'll certainly wait for the right cycle to move in or when there is a good property to show up.

Regarding buyers agent, how can they know / got the information before it hits the online real estate agent website ?

 

Win/Win relationships. Would save everyone a lot of hassle. I'm sure REAs would rather not deal with the hoards of buyers in times like this - they need time to schmooze the vendors,drink their lattes and advertise their success. That's my guess, anyway.

 

Census data (but remember it is old)
Real estate websites - listings for purchase and rent
Rpdata, pricefinder etc
Development sites

 

@CosmicTrevor : many thanks for the suggestion Trevor. That does make sense and easily available for free, except some premium website subscription.

 

I have done some analysis of suburbs comparing the 2006 to 2011 census. Of course the data for 2011 is quite old now - but it gives a feel for what is happening in a suburb, the types of dwellings, the types of families, the unemployment rate - it is a gold mine. But, as I said it is indicative only and no guarantee of what happens next. If the 2016 census goes ahead I'll be diving right into it to look at the 10 year trends.

 

I got the following email from a real estate company about a week ago:

​

Brisbane landlords would do well to take a good look at some of the stats in this post. Our team are amongst our inner-city's biggest fans, we believe this is a wonderful place to live, and the trend to move home from our outer suburbs is still gaining momentum. But even if you wanted to put 'spin' on the looming supply to our rental market, the numbers tell a not-so-pretty picture.

In 2016, unless there's some dramatic change in demand trends, there'll be enormous pressure on inner-city Brisbane rents to drop.

The strength of sales in our off-plan apartment projects has been well documented and the cranes are there for all to see. Brisbane has been a major magnet for investors from across Australia and especially our southern states, who've seen value and opportunity in these new buildings. It's become near impossible to track the progress of every building, so this post explores just one area (clearly the city's busiest), the South Brisbane/West End peninsula. This wraps up all of postcode 4101 including South Bank and Highgate Hill.

In the first half of 2016 in this inner south pocket, we estimate construction will reach completion on 1,608 new apartments. And no matter how property developers or agents report this, it's a huge quantity. An unprecedented number. And we estimate around 1,450 of these apartments will be offered the rental market.

So let's put this into context. In this postcode we currently have around 6,180 rental homes so it's a potential 23% leap in supply. In just a 6 month window of time.

We know from experience the impact won't be quite this high. A regular feature of Brisbane's inner-city marketplace is the sale of second-hand rented apartments to owner-residents. Tenants continue to be booted from these homes in big numbers, so there's a steady nibbling at supply. There's also some conversion of long term rentals to the short stay market, especially in buildings within easy walking distance of the CBD in South Brisbane for example.

During the second half of 2014 we saw one of the first big waves of new apartments completing, with more than 600 offered for rent in South Brisbane alone. Yet the postcode's rental pool grew by just 490 over this past 12 months. This was still a big growth in supply but rents held firm with the median 2 bed apartment rent rising by $10 to $520 per week and a local 3 bed house down $20 to $560 per week.

And as local property managers we are witnessing first hand the extraordinary interest in the 4101 lifestyle from both tenants and owners. As this area gains population its amenities, home-hunters' perceptions of safety and the local sense of community improve remarkably. In just a short couple of years we've seen it become so much more liveable and it's exciting to watch up close.

The balance of 2015 should be okay, with only around 60 new rental apartments completing in postcode 4101. Even the second half of 2016 looks 'digestible', with approximately 400 rental apartments to be completed.

But for all the positives 2016, and especially its first half, will inevitably be a tough period for investors in this area and all inner-Brisbane suburbs. Landlords would be well-advised to prepare ahead of time, carry out small renovations or refreshing to ensure you're competitive with these new apartments, and more than ever look after your good tenants.
The investors have made their choice. We're about to find out just how popular our inner-city really is with our tenants.

 

The issue is finding tenants. That's when prices will soften when the tents aren't what was expected.
The buyers aren't living there

 

I would consider the following areas to be experiencing or will experience an oversupply of units in the near future:

• Brisbane CBD
• Fortitude Valley
• Wooloongabba
• Southbank
• Nundah
• Chermside
• Moorooka

Older style units may get CG benefit due to the natural gentrification in these areas however yields would naturally drop due to supply. 400k would easily get you a decent house in Brisbane 30km withing the CBD with better yields and better CG prospects.

 

I will add Milton to this list - the transformation in this suburb is amazing. Couple of new builds nearing completion and a lot more underway.

12 months ago, the vacancy rates are sub 1%. Fast forward to 2016......

 

If thre is more apartment being build in one suburb/area can we say that the price of free standing existing house will be improved or appreciate over time ?

Note: I've seen this happens in Arncliffe NSW despite the area is strong with middle eastern culture (moderate one not the extremist).