Inner Brisbane Apartments 2016 2023 Extract to indicate the general nature of the report Residential Property www.bis.com.au
Contents Inner Brisbane Apartments 2016 2023 Contents EXECUTIVE SUMMARY... I 1. INTRODUCTION... 1 2. BACKGROUND TO THE CURRENT INNER BRISBANE APARTMENT SITUATION... 5 2.1 Economic overview... 7 2.1.1 National... 7 2.1.2 The Queensland economy... 9 2.2 Brisbane s residential demand... 10 2.2.1 Net overseas migration... 11 2.2.2 Net interstate migration... 11 2.2.3 Underlying residential demand... 12 2.2.4 Detached house vs. other dwellings... 13 2.3 Brisbane s residential supply... 15 2.3.1 Total dwelling approvals... 15 2.3.2 High density dwelling approvals... 16 2.4 Outlook for Brisbane prices... 17 2.4.1 Houses... 17 2.4.2 Units... 18 3. APARTMENT DEMAND... 21 3.1 Population growth... 23 3.2 Demand drivers... 23 3.2.1 Students... 24 3.2.2 Young Apartment Dwellers (YADs)... 26 3.2.3 Empty nesters... 27 3.3 Underlying demand... 28 3.4 Purchaser profile... 30 3.4.1 Owner occupiers... 30 3.4.2 Investor owners... 32 4. SUPPLY OF INNER BRISBANE APARTMENTS... 35 4.1 Supply pipeline... 37 5. INNER BRISBANE APARTMENT RENTALS... 43 5.1 Renter profile... 45 5.2 Vacancy rates... 47 5.3 Inner Brisbane Apartment rentals... 47 5.4 Rental bonds held... 49 5.5 Rental demand and supply... 51 5.6 Rental forecasts... 53
Inner Brisbane Apartments 2016 2023 Contents 6. APARTMENT SALES... 55 6.1 Residential investment... 57 6.2 Rental yields... 58 6.3 Negative Gearing & Capital Gains Tax... 60 6.4 Off the plan prices... 61 6.5 Interstate and overseas buyers... 62 6.5.1 Interstate purchasers... 62 6.5.2 Foreign investment... 63 6.6 Forecast Inner Brisbane Apartment price growth... 64 6.7 Site sales... 66
List of Tables Inner Brisbane Apartments 2016 2023 Table I: Table II: List of Tables Share of apartments by precinct and forecast apartment completion, Inner Brisbane Apartment Area... vi Forecast price growth of IBA Area apartments based on median unit price, 1992 to 2023... xii Table 2.1: Median house and median unit price forecasts, Greater Brisbane... 18 Table 3.1: Population growth, IBA Area vs. Greater Brisbane... 23 Table 4.1: Share of apartments by precinct and forecast apartment completion, Inner Brisbane study Area... 39 Table 4.2: Apartment completions by IBA precinct... 40 Table 5.1: Apartment rental share and occupancy type, 2011... 45 Table 5.2: Location of residents five years previous, renters and owner occupiers, 2011, Inner Brisbane study Area... 45 Table 5.3: Age composition in private rental apartments, 2011, Inner Brisbane study Area... 46 Table 5.4: Inner Brisbane two bedroom weekly median apartment rentals, 1994 to 2015... 49 Table 5.6: Inner Brisbane apartment rental market... 52 Table 5.7: Forecast median apartment rentals... 54 Table 6.1: Inner Brisbane median off the plan apartment prices ($ 000), 1997 to 2016... 62 Table 6.2: Number and value ($b) of Australian residential property purchases by temporary residents and overseas people, 2009 10 to 2014 15... 64 Table 6.3: Country of origin, overseas purchasers of Inner Brisbane Apartments, 2013 to 2016... 64 Table 6.4: Forecast price growth of IBA Area apartments based on median unit price, 1994 to 2023... 66 Table 6.5: Reported selected recent apartment site sales, Inner Brisbane Apartment Area... 67
Inner Brisbane Apartments 2016 2023 List of Tables Chart I: Chart II: Chart III: Chart IV: List of Charts Projected apartment completions, Inner Brisbane Apartment Area... v Sources of Inner Brisbane Apartment occupier demand... vii Annual change in underlying demand components, IBA Area... ix Underlying rental demand, supply and deficiency, IBA Area, 1999 to 2023... x Chart 1.1: Inner Brisbane Apartment Area precincts... 3 Chart 2.1: Key economic indicators, Australia... 8 Chart 2.2: Net migration, Queensland, 1988 to 2023... 12 Chart 2.3: Chart 2.4: Underlying residential demand, supply and underlying stock deficiency, Greater Brisbane, 1992 to 2023... 13 Stock deficiency/excess, detached house vs. other dwellings, Greater Brisbane, 2011 to 2023... 14 Chart 2.5: Total number of dwellings approved, Greater Brisbane, 1992 to 2022... 15 Chart 2.6: High density dwelling approvals by Greater Brisbane regions, 2002 to 2016... 16 Chart 3.1: Drivers of Inner Brisbane Apartment occupier demand... 24 Chart 3.2: International student enrolments, Queensland... 25 Chart 3.3: Inner City stand alone office work force, Brisbane, 1993 94 to 2022 23... 26 Chart 3.4: Population growth of the empty nesters, Brisbane... 27 Chart 3.5: Annual change in underlying demand components, IBA Area... 29 Chart 3.6: Underlying apartment demand by sector vs. total apartment stock, IBA Area... 30 Chart 3.7: Population tenure by age group, owner occupiers vs. total residents, IBA study Area, 2011 Census... 31 Chart 3.8: Mix of incremental stock of apartments 1, Inner Brisbane Apartment Area... 33 Chart 4.1: Projected apartment completions, Inner Brisbane Apartment Area... 37 Chart 4.2: Apartment in proposed projects, IBA Area precincts, April 2016... 41 Chart 5.1: Vacancy rates, Brisbane regions, 2003 to 2015... 47 Chart 5.2: Two bedroom weighted median apartment rentals, Inner Brisbane study Area, 1994 to 2015... 48 Chart 5.3: Change in number of rental bonds held, Inner Brisbane study Area, 1996 to 2015... 50 Chart 5.4: Underlying rental demand, supply and deficiency, IBA Area, 1999 to 2023... 51 Chart 6.1: Value of residential loans attributable to investment property, Queensland, moving annual totals (current and 2015 dollars)... 57 Chart 6.2: Indicative rental returns IBA Area & Metropolitan Brisbane units, 1997 to 2015... 58 Chart 6.3: Indicative rental returns IBA Area by number of bedrooms, 1994 to 2015... 59 Chart 6.4: Indicative rental yields by IBA Area precinct... 59 Chart 6.5: Off the plan Inner Brisbane Apartment prices, 1992 to 2015... 61 Chart 6.6: Share of IBA Area first time apartment sales by state to interstate purchasers, 2008 to 2016... 63 Chart 6.7: Rental yields vs interest rates, IBA Area, 1994 to 2023... 65
Introduction Inner Brisbane Apartments 2016 2023 1. INTRODUCTION Inner Brisbane Apartments 2016 to 2023 examines the principal drivers of demand for inner city dwellings. The study then forecasts future demand, supply, prices, and rentals in the market to June 2023. The study covers apartment building, stock, and market activity in the following Inner Brisbane Areas (Chart 1.1): The CBD and adjoining Spring Hill Area; The Inner East precinct includes the primarily waterfront locations of East Brisbane, Kangaroo Point and New Farm, directly across the Brisbane River; The Inner North precinct, which includes the Urban Renewal Areas covering Bowen Hills, Fortitude Valley, Herston, Kelvin Grove, Newstead, and Teneriffe; The South Brisbane, West End, and Highgate Hill Area surrounded by the Brisbane River; The Toowong precinct, containing Auchenflower, Milton, St Lucia, Taringa and Toowong; Woolloongabba and Dutton Park, bounded by Brisbane River and Norman Creek, south of the Inner East precinct; and The Hamilton precinct, encompassing the entire Northshore Hamilton urban renewal Area. Chart 1.1: Inner Brisbane Apartment Area precincts 3
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