Brisbane apartment supply to remain very limited

The city is expected to endure several more years of limited supply.

In a report, JLL said Brisbane's new apartment supply has been very limited for a number of years now. While completions will rise slightly over 2024, they will still be low and very challenging development conditions will likely keep it low for at least several more years.

“Rental vacancy remained a low 1.1% in June 2024 (SQM Research) and has been around 1% for an extended period now. The moderate supply pipeline means there will be little supply relief and vacancy is likely to remain tight over the foreseeable future,” the report added.

Here’s more from JLL:

Brisbane housing demand for existing stock has remained robust, despite high interest rates and a constrained credit environment. Strong population growth is underpinning underlying housing demand and investor demand is improving.

For the apartment pre-sale market, demand has remained robust for high-end owner occupier stock, driven by downsizers. However, demand for mass-market apartment projects is still muted and there are few projects actively marketing at present.

Strong price growth starts to slow

Limited supply in both the new and existing apartment markets have seen median existing unit prices surge 18.8% over the year to June 2024 (CoreLogic). However, there is some evidence the pace of growth is starting to slow.

Tight vacancy has seen Brisbane rents grow by 40-50% over the past three years across various product types. Affordability is now stretched in many sub-markets and the pace of growth is slowing.

Outlook: Under-supply pressures to remain

Brisbane apartment developers are finding it difficult to compete with infrastructure projects for construction labour and this will keep supply levels moderate over at least the next few years, while at the same time demand is likely to build.

While supply shortages will support both price and rental growth over the medium term, affordability is stretched in the market and is likely to continue to slow the pace of growth in the near term.

Note: Brisbane Residential refers to Inner Brisbane apartments.

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