The Brisbane apartment market will continues to stabilise, a new report from JLL said.
The firm’s Australia Residential Research - April 2019 said that as supply and demand recalibrate, the Inner Brisbane apartment market will continue to stabilise throughout 2019 and into 2020.
“Inner Brisbane’s apartment supply has been steadily declining since 2016,” it said.
“In 2018, supply was around 27% below that peak.”
Supply forecasts for 2019 are estimated at 40% below 2018, and less than half of the 2016 peak.
“As poor sentiment and apprehensions around oversupply receded, the medium-term outlook for Brisbane’s inner city apartments is increasingly bright,” JLL said.
“While credit conditions and the Federal election will keep activity subdued in the short-term, a rapidly improving supply/demand balance should see Brisbane lead the next residential cycle.”
Underlying demand will continue to be boosted by robust population growth, particularly net interstate migration.
“Increased infrastructure investment and an improving labour market should both support the local economy,” the report said.
“Steady population growth will continue to support underlying demand and aid the absorption of excess apartment stock.”
While development conditions remain challenging, supply is expected to remain subdued for several years.
“Developers are unlikely to pursue high density projects over the next few years,” JLL said.
“Instead, they are more likely to focus on ‘less-is-more’, luxury and boutique developments.”
Apartment values and rents are expected to stabilise as the market rebalances into 2020.
“Negative price growth continues, but the pace of decline is decelerating,” the report said.
“The rental market is showing strong signs of improvement, with vacancy and rents stabilising.”