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Monday 7 January 2019

Brisbane construction slows

An Englishman in New Farm

Inner-Brisbane has been an apartment construction hotspot (and then some) over recent years, to the extent that even the landlocked peninsula suburbs where very little new supply has been constructed experienced weakening rental markets. 

The construction is slowing down now, and although the supply-responsive locations (West End, South Brisbane, Newstead, CBD) are still working their way through the excess stock, rental markets are now steadily tightening in New Farm and Teneriffe.

QLD 4005 is, in my biased opinion, already one of the finest postcodes in this part of Queensland from a livability perspective - you can cycle to the office along the riverwalk, or jump on the CityCat, and there's a cafĂ© on every corner - and it is now benefiting further from the opening of Howard Smith Wharves

Vacancy rates have already fallen to six-year lows, while January to April is a normally the busiest time of year for letting agents, and should see a seasonal surge of new tenants. 

Source: SQM Research

We expect to see more attached dwellings constructed as the capital cities mature, of course, but Queensland really went for it through this cycle with record sales to Chinese investors helping to fuel the boom. 

Attached dwelling starts peaked two years ago, and interstate migration to Queensland is now at the highest level in a decade, tilting the rental markets back into balance. 

Tim Lawless of CoreLogic noted that interstate migrants are important for housing market dynamics: they often bring equity, or are motivated to buy...or both.