Brisbane market will see rents rise as supply and demand begins to balance out

“Confidence is returning to the Brisbane inner city apartment market as vacancy tightens and developers start planning new projects.

RENTS are expected to rise as the Brisbane inner city apartment market continues to tighten with oversupply hitting its peak four years ago.

According to JLL’s latest 4Q 2019 Residential Apartment Market Report inner city apartment completions across Australia’s capital cities fell 21 per cent last year.

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JLL’s head of residential research — Australia, Leigh Warner said developers were growing in confidence, especially in Brisbane which was well ahead of the rest of the country in the cycle.

He said the REIQ recently reported that apartment vacancy has fallen below 2 per cent for the first time since 2012.

“Brisbane apartment supply peaked way back in 2016 and the market is now well advanced in the rebalancing of demand and supply.,” Mr Warner said.

Less than 2900 apartments completed in inner Brisbane in 2019, which is around 60 per cent lower than the 7000 apartments delivered in 2016.

“Brisbane is already seeing the re-emergence of rental growth and it will be at the front end of the next cycle.”

Mr Warner said developers were growing in confidence and looking to position themselves for the next cycle.

“But the reality is that it remains tough to get projects started at present. With the long lead-times for larger apartment projects, this means it will take several years for the apartment supply pipeline to really ramp up again,” he said.

“In the interim, continued strong population growth will keep underlying demand growth robust and see conditions tighten up quite quickly.””