Lessons from the Melbourne apartment market
A recent article published by Domain that shed light on the Melbourne apartment market’s recent slow down could be a window into the future for Brisbane owners. Here’s an excerpt from Domain.com…
“There is not going to be an auction today,” declared the young sales executive standing in the entrance foyer of an apartment building in Abbotsford.
It was just two minutes before a two-bedroom apartment in the block was scheduled to be auctioned on a Saturday in early April – and now the sale had been called off.
Only three people turned up for the auction. The one good prospect interested in purchasing, a young woman, had opted a day earlier to buy another unit in Northcote.
A second potential buyer was struggling to get finance approved by his lender. He was missing in action, too.
Although apartments remain an affordable option for Brisbane buyers, the future resale value has begun to come into question. The market indicators show a glut of new stock coming onto market in the next 3-5 years around Brisbane’s inner city suburbs, which could spell trouble for some.
Older stock has already begun to be affected, as resale value’s level off due to the glut newer stock. But it’s the combination of increased supply, tighter lending conditions on investors and the latest rumblings of an interest rate rise which should put investors on notice.
While many industry experts including Capital Economics chief economist Paul Dales believe Brisbane to be the least exposed of the Nation’s capital cities, knowing the signs and understanding trends is important for good decision making.
While the Brisbane apartment market is by no means in the same state as Melbourne’s, there are lessons to be learnt for the savvy investor.