Unit Prices Under Threat
Brisbane’s new inner city apartment prices could fall by 25 per cent in 12 to 18 months, according to a senior academic.
QUT property economist Chris Eves said restrictions on capital flow out of China would “devastate” the apartment market.
“It will devastate the inner city unit market, which is geared towards foreign owners,” Professor Eves said.
“Foreign buyers think it’s great to invest in the city because they live in high rise cities. They think it is the only place to buy.”
Professor Eves said with less Chinese demand, developers would struggle.
“[Developments] two or three months off completion might not be able to settle the final payment now,” he said.
“Developers will have to put them on the market and with the lack of demand they will have to discount their prices.
“Some developers will go out of business – this always happens in oversupply situations.”
AMP Capital chief economist Shane Oliver said a 25 per cent drop prediction was “a little high”.
“I predict a 15 to 20 per cent drop, but that’s not in the next 12 months, maybe over the next couples of years,” Dr Oliver said.
“I am concerned about the oversupply, that’s got more to do with the supply coming in.
“There’s been a lot of talk about Chinese demand slowing, but it hasn’t happened.”
Dr Oliver said Brisbane could end up with a “confused market”.
“There could end up being areas where there’s contained oversupply feeling the impact, but 30 minutes away no impact at all, because Brisbane, unlike Sydney, is more contained,” he said.