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REIQ Journal : February 2010
An under supply of inner city apartment stock in Brisbane will see upwards pressure put on prices for existing dwellings in 2010, according to CB Richard Ellis. CBRE's residential project marketing director Chris Lit n said the lack of new developments and a dramatic drop o in dwelling approvals, particularly for apartments, in 2009 had combined to create a signi cant under supply. "Approvals for units in the Brisbane Statistical District in the rst half of 2009 declined by approximately 40 per cent to a record low of 1500 and that situation only got worse in the second half of the year". "Our research shows that there is annual demand for between 1,500 and 1,700 dwellings per annum and the current level of approvals is well short of that which means that supply will not keep pace with demand in the next two years." Mr Lit n said the drop in unit approvals was the biggest in more than a decade. "Dwelling approvals for houses are also down, but it is in the apartment sector that the largest drop has occurred and we believe that there is signi cant demand for apartment living particularly in the inner city area," he said. "The scarcity of sites available for apartment development in the inner city area, combined with the current tight capital markets, are making it very hard for developers to fund new projects. This means that there is going to be a lag time of one to two years before any new product becomes available. "This has to put pressure on prices because the demand levels continue to grow." Mr Lit n said the Brisbane CBD apartment market was going to be less a ordable in the future and the size of new apartments will continue to decrease. He said the lack of suitable development sites and the premium achieved for inner city land would force this outcome. CBRE predicts residential rent increases for both apartments and houses in 2010 and said this upward trend would continue until there was a signi cant increase in new development approvals. "Over the next two decades the population of metropolitan Brisbane is expected to hit 2.4 million and if international trends are an indication there will be a big percentage of those people who will want to live within the inner city area," he said. "All indicators point to signi cant price increases for any existing stock within a two to three kilometre radius of the city centre." Apartment stock shortage in Brisbane CBD to force prices up Green planning to be recognised and rewarded Sustainable case managers have been appointed to fast-track well planned and environmentally friendly developments. Minister for Infrastructure and Planning Stirling Hinchli e said the implementation of sustainable case managers within the Department of Infrastructure and Planning's regional o ces would ensure green development proposals were recognised and rewarded. "Developers with large-scale and highly sustainable proposals in the development assessment system should be able to use a 'green door' to get an answer sooner," Mr Hinchli e said. "By working closely with local councils, the department's sustainable case managers will be able to identify applications with the potential to make a real di erence to the environment. "While the criteria is still being nalised, what we're looking at is well-planned major new communities, rather than individual houses. "These whole-of-estate plans might include houses with six-star energy e ciency ratings, renewable energy on site, recycled water technology, public transport in place from the very rst block and local jobs to cut car use." In the rst half of 2010 a Green Door Advisory Committee of local government, industry and sustainability experts is expected to be in place to further advise on sustainable features and the suitability of applicants Mr Hinchli e said fast-tracking sustainable development applications would not only deliver a green dividend for our community, it would get projects to market faster and improve job opportunities. REIQ Journal February 2010 INDUSTRY NEWS 11
December January 2010