The volume of new apartment sales in Brisbane has collapsed by more than 70 per cent in a year, according to analysts Urbis’ latest market report.
The rapid contraction in the apartment market saw just 302 sales in the March quarter down 37 per cent on the previous quarter and well down from the 1032 sales in the previous corresponding period last year.
The results reflect a range of problems including tighter and more expensive financing for both buyers and developers and taxes on foreign buyers. There are also suggestions of oversupply.
She’s coming apart, capt’n:
Scant comfort for these idiots, via The Australian:
Prominent agency owner Andrew Coronis, managing director of Coronis, which operates 23 offices across southeast Queensland, said tenants were moving more readily to get better deals, forcing existing unit stock and “investor-style” apartment owners to cut prices.
“We’re seeing a 17 per cent drop in rents and it is happening right now,” Mr Coronis said. “It is between 10 (per cent) and 17 (per cent). Everybody is scrambling to lock tenants down.”
Mr Coronis said gave the example of an older sixpack style unit block in suburban Chermside where previous rental income was about $420-$430 and would now attract between $350 and $360 a week.
…The warning comes after Real Estate Institute of Queensland figures showed the official vacancy rate in inner Brisbane was 4.4 per cent, the highest proportion since the global financial crisis. The previous peak was 4.1 per cent in the December quarter of 2013.
Deflation is not yet showing up in official figures but at that rate it can’t be long:
Specufestors absolutely creamin’ in it now, not. Assuming the common 100% leverage, the negative carry is blooming as interest-only costs rise, management fees remain, income is smashed and inflation rises all around.
The only rational response is to sell.