Demand for High Quality Owner Occupier Style Apartments Grows, as Shortage of Supply Continues

A deepening affordability crunch has driven people back to apartment living but stock levels cannot meet demand in the near term, an industry report warns.

Charter Keck Cramer’s report on the apartment market shows owner-occupier targeted developments could help to shore up stock levels because they are more appetising to buyers from the southern states, and locals who are priced out of housing markets.

“This particular sub-market gained significant momentum through 2021, with record prices and robust sales velocity achieved for premium product,” the report said.

But apartment construction commencement numbers were significantly down across major capital cities in Australia last year.

Brisbane’s apartment market underscored a very low commencement rate of just 1500 apartments, the lowest number of apartments commencements in the past decade, down 88 per cent from its 2015 record of 12,200 apartments. Assuming all marketed stock proceeds to practical completion , around 2,000 apartments are anticipated to be completed in 2023 and 1,300 apartments in 2024. Experts warn there is likely to be a shortage of supply over the next 2-3 year, as population growth returns to the capital city.

The report said a growing acceptance of family living in apartments, increased detached dwelling affordability constraints and record median house to apartment price gaps would encourage a flight to apartment living.

The “alarming” low number of apartment project launches and commencements across Brisbane last year means that new supply will continue to be constrained over the next two to three years. 

“With that growth will come the demand for additional and diverse forms of living … at present supply will not be able to respond as quickly to demand which suggests that vacancies will decrease, and rents and prices will increase.

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