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Thursday, 6 July 2017

Some lights are on; anyone home?

Brisbane units

I recently wrote a short blog piece on the different ways in which the Brisbane apartment market is slowly adjusting to oversupply.

In 2015, it was typically far easier to get apartment approvals across the line, with Brisbane City Council and town planners generally more amenable to borderline applications.

Today code assessments are more stringent, and in any case developers are struggling to sell out existing projects, let alone get new projects off the ground. 

The Skyring at night

Officially reported vacancy rates are quite elevated in Brisbane, particularly in the construction hotspot inner suburbs. 

Vacancy rate figures may struggle to pick up multiple apartments available for let behind one advertisement, while another unknown is how many apartments are being deliberately left vacant by non-resident owners.

The 2016 Census figures showed that of the dwellings constructed over the past four years, 17 per cent were unoccupied.

You'd normally expect to see about one dwelling in ten vacant on Census night. 

There could be a number of other explanations for the higher number of unoccupied dwellings, including properties that are ready for demolition, due for repair, available to be let (whether through official web portals or elsewhere), or those that are only newly completed and not yet inhabited.

The simplest of all tests is simply to take a wander around the construction hotspots in the evening.

This is the Skyring at 9.30pm last night. 

You would be hard pressed to draw too many firm conclusions from this except to say that the units are clearly filling up, however gradually. 

A year ago the same photograph would have yielded only a great blackened void.

It's clear that some new blocks are more occupied than others. 

And some of the more upmarket developments on the waterfront seem to be reasonably well utilised, despite the higher price tags. 

Moreover, there does seem to be more activity in the area generally, with new department stores and schools opening, and a noticeable uplift in traffic and usage of the local parks.

Overall, it appears that renters are steadily filling up the new centrally located developments with high 'walkability' appeal in favour of Brisbane's dated middle ring rental stock (of which there is a great deal). 

More thoughts here.


International trade figures are due out at 11.30am morning.

A resurgent trade surplus is forecast for the month of May driven by rising LNG exports after the April result was impacted by the Cyclone, although a sharp decline in the iron ore price will offset this.