Brisbane apartment prices could fall by 25%
Brisbane apartment values could drop by a quarter over the next year to 18 months.
Queensland University of Technology professor of property economics Chris Eves has told the Australian Financial Review that overseas buyers walking away from off-the-plan settlements could see apartment prices in inner city Brisbane collapse by as much as 25%. Eves told the AFR that new measures introduced in China to curb capital flow could mean many overseas buyers who purchased off-the-plan apartments in the past six to seven months might not reach settlement.
"Developers will have to put these apartments on the market and with the lack of demand they will have to discount their prices. Some developers will go out of business – this always happens in oversupply situations," Eves told the AFR.
Eves said Brisbane developers “have gone overboard” with bringing stock to market. While he predicted significant declines for the Brisbane market, Eves suggested Sydney and Melbourne could be relatively insulated. He argued that Sydney had priced out many foreign buyers, while Melbourne could see much less severe price falls as a result of its more diverse pool of buyers.
Eves isn’t the first to predict trouble for the Brisbane apartment market. A recent report by Place Projects showed off-the-plan sales for inner city Brisbane apartments fell 44% for the June quarter.
Economic forecaster BIS Shrapnel has also predicted declines for the housing market off the back of an oversupply of off-the-plan apartments, but senior manager Angie Zigomanis told the AFR a forecast of 25% price declines was “probably a bit excessive”.