Areas around West Metro in Sydney, Metronet in Perth and Metro Rail Tunnel in Melbourne are the key areas likely to see increased sales apartment activity in the near future, according to figures released by market research group Urbis.
Urbis group director Clinton Ostwald says that while the number of apartment sales has slowed significantly recently, spending on transport infrastructure will help support demand across the national apartment market into the future.
His comments come following the release of Urbis’ latest ‘Apartment Essentials’ report which found that 7% of available stock surveyed sold in the first quarter of 2019.
In terms of apartment sales, the best performing market of the last quarter was the Gold Coast where 9% of available surveyed stock sold with a national weighted average sales price (NWASP) of $787,608.
The next best performances came from the Brisbane market where 8% of available stock sold (NWASP of $638,409) during the quarter and Melbourne where 7% of available surveyed stock sold (NWASP of $621,246). In Perth the figures tallied 6% and $604,212 respectively while in Sydney, just 4% of available surveyed stock sold and the NWASP stood at $1,091,935.
The most popular product type also provided some interesting points with two-bedroom, two-bathroom apartments selling best in Sydney, Brisbane, Perth and the Gold Coast but one-bedroom, one-bathroom apartments in most demand in Melbourne.
Owner occupiers have continued to be the most active buyers in the Australian apartment market, accounting for 51% of buyers in the period referenced.
Foreign investors have been pushing sales in Sydney, Perth and the Gold Coast, accounting for over a quarter of buyers, but have dropped in Brisbane, the Urbis report shows.
Interstate investors were interested in the Gold Coast (25%) and Melbourne (11%) whereas Sydney, Brisbane and Perth appealed more to local investors.
Urbis, which closely monitors development projects, says its research shows that the number of apartment development approvals has decreased each quarter over the past 12 months.
The number of apartment developments achieving minimum presale levels had also declined dramatically during this time and Urbis warned this, together with the slow down in sales, will result in a large pipeline of approved projects that are unlikely to move to construction in the near future.
Given ongoing population growth from natural increase and migration, the market would likely see a shortage of new housing emerge over the next 12 to 18 months, the Urbis report noted.
As momentum returns to the market as competition for housing intensifies, areas with new or emerging infrastructure will hold a distinct advantage, it says.
“In addition to activity in Sydney, Melbourne’s Westgate Tunnel will uplift the Inner West and Western Corridor with approximately 7,500 apartments approved in these precincts, while Brisbane’s Cross River Rail is highly anticipated in the Inner South where there are over 8,000 approved apartments.
“In the longer term, we expect that areas around West Metro in Sydney, Metronet in Perth and Metro Rail Tunnel in Melbourne will see increased apartment activity.”