Property “bloodbath” in 2018: unit warning issued
BRISBANE'S oversupplied apartment market and parts of southeast Queensland's housing sector are headed for a "bloodbath" in 2018, according to one property commentator.
Buyer's agent and former valuer Anna Porter, principal of Suburbanite, has some blunt advice for unit investment holders in Brisbane - get out now.
"Steer completely clear of units," she said.
"They're incredibly oversupplied and there will be a bloodbath in the unit market over the next couple of years.
"Lending will tighten, values will retract and rent will be hard to maintain."
The latest Urbis apartment report revealed 300 new units were sold in Brisbane in the September quarter of 2017, with the average sale price dropping more than $80,000.
Another 7100 apartments are expected to reach settlement in 2018.
Urbis property economics and research director Paul Riga said Brisbane apartments were still selling, even in the current market conditions.
"Established local developers with a reputation for quality product and strong networks are achieving great results," he said.
"For the rest of the market, it is certainly harder than it was 18 months ago but sales continue to tick over quarter after quarter."
But Ms Porter is not just concerned about the Brisbane unit market.
"Down the southeast pocket of Queensland, towards Logan and Ipswich, we're going to start to see some pain I think towards the end of 2018," Ms Porter said.
"We're starting to see the local council cracking down on a lot of the granny flats being illegally rented. A lot of people have purchased these properties with the idea of getting a dual income, but this is being stripped away from them.
"There is also a little bit of pressure on interest rates, and vacancy rates are creeping up."
Ms Porter said there was also a lot of new stock coming to the market in the form of house and land packages.
"This is starting to push a huge amount of supply into the market," she said.
Ms Porter predicts consistent growth for Brisbane house prices in the year ahead, with renovated houses likely to continue to sell well.
"A tip for young players - renovate in Brisbane," she said.
"Renovated properties in Brisbane sell a lot better. Add value and you will see an uptick."