Does Size Matter?

There exists a multitude of apartment buildings across the Brisbane market, ranging from high density apartments with plenty of amenity to small boutique apartments without all the extra bells and whistles and everything in-between.

We have undertaken an analysis of high, mid and low-rise buildings to judge which has outperformed in recent times.

Place Advisory has categorised Brisbane’s inner city apartments into high, mid or low-rise categories based on the size of their building. Low rise apartments are those found in buildings of 10 or less apartments. Mid-rise apartments are those found in buildings with 11 to 40 apartments whilst, high-rise apartments are those found in buildings of 41 or more apartments.

Low-Rise Apartments Overall: Low-rise apartments have recently become the second most expensive apartment type, due to an increased appeal with local purchasers seeking property in smaller community orientated buildings. Apartments in this category have also proven to be the best performers over the last 10 years, whilst sales volumes are the most consistent.

Mid-Rise Apartments Overall: As recent buyer trends shifted towards high-rise apartment living, mid-rise apartments have begun to fall behind in recent periods. However, these apartments have recorded the second best growth rates over the past 10 years, while, sales volumes have also contracted at a rate between the other two categories.

High-Rise Apartments Overall: Bad press and plenty of supply has hamstrung growth in the high-rise apartment market. Since sales volumes peaked in 2014, the number of high-rise apartment sales has declined the most as the rate of new projects entering the market steadily declines. High-rise apartments have recorded the lowest long-term growth of all three categories over the past 10 years.

Inner Brisbane Apartment Sales │10 Years to September 2017

Source: RP Data. Prepared by Place Advisory.

Inner Brisbane Apartment Market Overview

Place Advisory has summarised the important points to note concerning price movements of high, mid and low-rise apartments over the last 10 years.

At the end of the September 2017 six month period, high-rise apartments had recorded a median value of $482,000. Low-rise apartments, which recently passed mid-rise apartments in price, followed with a median price of $475,000. Mid-rise apartments recorded the lowest median price of $470,000. While high-rise apartments have the highest median price, they experienced the lowest rate of growth over the last 10 years, recorded at an average rate of 0.9% per annum. Mid-rise apartments experienced average annual growth of 1.5% in median prices whilst, low-rise apartments experienced the highest rate of growth of 3.2% per year.

Median Price Trends

As the market continues to evolve we are seeing various trends become more evident. Reflective of the current market in Brisbane, all apartment categories appear to be experiencing a downward trend in median prices from their peaks at the end of the September 2015 six month period, although low-rise apartments appear to be reversing this trend. In fact, when apartment prices peaked, the median price of high-rise apartments was 7.7% higher, whilst mid-rise and low-rise apartments were 8.5% and 7.4% higher respectively, when compared to current prices.

Sales Volumes

During the last 10 years, sales volumes reached their highest level during the September 2014 six month period, and as expected, have declined steadily since then to return to normal levels. Overall, sales volumes in the most recent September 2017 six month period are 57% less than at the peak. During this most recent period, high-rise apartments recorded 655 sales. Mid-rise apartments recorded 393 sales whilst, low-rise apartments recorded 831 sales.

Currently, sales volumes indicate a shift in buyer trends which is likely a result of a current lack of confidence and stricter lending conditions in the high-rise apartment market in Inner Brisbane.

** It is important to note that there is a lag in the sales data available for new apartment sales as off the plan sales are recorded at the date of settlement. Therefore, it is important to note that the actual number of new apartment sales in recent records will be higher than what is shown in the chart above. Click here for a recent overview of Brisbane’s off the plan apartment market.

Apartment Price Points by Building Density Type

 

Source: RP Data. Prepared by Place Advisory.

Price is a major factor when considering to purchase an apartment or other type of property. Place Advisory has analysed apartment sales over the last 6 month period ending September 2017 and summarised the findings below:

The majority of low-rise apartment sales occurred within the $300,000 to $399,999 price bracket, accounting for 25% of all low rise apartment sales during the period. In contrast, the most common price point for high-rise apartments was the $400,000 to $499,999 price bracket which accounted for 23% of all high-rise apartment sales. Mid-rise apartment sales were most common in both of these price brackets, recording 22% of all mid-rise apartment sales in both the $300,000 to $399,999 and $400,000 to $499,999 price brackets.

Considering only the $700,000 plus price bracket, high rise apartments recorded the largest proportion of sales of 17% at this price point. Low-rise apartments recorded 15% of sales above $700,000 while, mid-rise apartments recorded 14% at this price point.

Inner Brisbane Apartment Building Map

 

Source: RP Data, Tableau. Prepared by Place Advisory.

The interactive map above shows the location of each apartment building in Inner Brisbane, categorised as high, mid or low-rise. As can be seen, high density apartments are predominantly centred along the Brisbane River, in areas such as the CBD, South Brisbane, West End and Newstead.

The further away from the CBD, in the more suburban areas of inner Brisbane, is where the majority of mid and low-rise apartment buildings are found. These areas are constantly becoming more popular due to their proximity to the CBD, reliable public transport, and other lifestyle factors such as restaurants, shopping precincts and entertainment hubs.

** The Inner Brisbane area includes the following suburbs: Albion, Auchenflower, Balmoral, Bowen hills, Brisbane City, Bulimba, Coorparoo, Dutton Park, East Brisbane, Fairfield, Fortitude Valley, Greenslopes, Hamilton, Hawthorne, Herston, Highgate Hill, Indooroopilly, Kangaroo Point, Kelvin Grove, Milton, New Farm, Newmarket, Newstead, Norman Park, Paddington, Red Hill, South Brisbane, Spring Hill, St Lucia, Taringa, Toowong, West End, Wilston, Windsor and Woolloongabba.

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