One of the most interesting aspects of being a buyers’ agent is observing how Brisbane’s property market changes and evolves.
In recent times, you may have heard about the uptick in demand for affordable units. The reason is that buyers who are unwilling to compromise on location but are hamstrung by price are choosing units as an alternative to a house.
But from what I’ve seen lately the phenomenon of apartment appeal isn’t restricted to those affordable price points.
In fact, luxury apartments are an increasingly appealing option for homebuyers with deep pockets, and there are some good reasons why this is a sector worth watching.
Good money for great apartments
I recently helped a young coupled secure their first apartment. Despite it being their initial purchase, they had the means to get a very comfortable home.
For a price of $2.553 million, we helped them secure an apartment on the 84th floor of the Skytower development. It has exceptional views across Brisbane and luxurious fit out with a floorplan that included a private living space off the main bedroom.
We also have another client looking to spend considerably more than that. The brief is for a 450 square metre-plus penthouse apartment in New Farm, Teneriffe, or Newstead.
These are just two examples, but I know of many more in this space.
So, what’s behind this flurry of activity in our prestige apartment market?
The push for quality
On the demand side of the equation there are several eager buyer types.
We are seeing a run of downsizers and empty nesters at present. This cohort have cashed out of large family homes which saw exceptional value growth throughout 2021. They now want a low-maintenance, inner-city option that doesn’t compromise on quality. They’re attracted to the lock-and-leave option given travel is back on the cards. These buyers also love comprehensive common area facilities with onsite managers taking care of the maintenance.
Another group of buyers are the interstate migrants. Again, many made plenty of equity gains on their home during the recent boom. The attractions of Brisbane have brought them north to the city, and they can see the exceptional value on offer among our housing. Many of these buyers – particularly from Sydney – are already comfortable with apartment living.
This group is like the expat professionals coming back home in a post-pandemic rush. Eager to re-establish roots in Brisbane, and incredibly well cashed up after their overseas stint, expat purchasers are willing to shell out for quality stock.
There’s also the new generation of the young wealthy. Many have made a small fortune in the new economies, be it those who exited crypto at the right time or others with formidable social media followings. Some are successful entrepreneurs who’ve built fast-growth businesses.
The one thing common across all these buying groups is that they aren’t generally impacted by rising interest rates. They are mostly cashed up and able to purchase without needing a heap of finance.
Tight supply
On the other side of the ledger is supply. Let me tell you, as someone who looks to source property day-in, day-out, finding great quality, high-end apartments is tough at present.
Most are located either in the CBD or within very close proximity of it. Buyers can seek older stock in more dated buildings of course, but the newer prestige offerings are what many really want.
While Brisbane did go through an apartment glut back in 2015, that was mainly in investor stock and more generic designs. In truth, there’s been limited prestige apartment development in the past five years.
The other challenge at present is around construction costs, materials supply, lack of labour and limited profit margins for developers and builders. There are only a few projects on the horizon able to bring lux offering to the market anytime soon.
The solution
I expected we will see even more buyers looking to purchase a prestige apartment in the near future, but they will have a hard time finding the right property. Why? Because the limited supply we’re seeing at present is being offered first and foremost through industry networks like ours.
If you’re keen on purchasing a luxurious place in the sky, then engaging a buyers’ agent would be an excellent idea.