In Brisbane, the river is king.
Place Advisory has undertaken a study of the Inner Brisbane apartment market, particularly those apartments that are ‘absolute riverfront’ to show how this classification can impact things like price and capital growth, as well as finding which suburbs are most popular and expensive when it comes to waterfront property.
By nature, the riverfront market has recorded lower overall transactions compared to non-riverfront apartments due to the limited amount of waterfront property. The most recent six-month period, ending March 2015, recorded 176 riverfront sales. These sales represented only 9.4% of the total Inner Brisbane apartment market and are in-line with the ten-year average, where riverfront sales have accounted for just 8.7% of total apartment sales since 2005.
Generally speaking, a riverfront apartment in Inner Brisbane is much more expensive than their non-riverfront counterparts. The most recent six-month period ending March 2015 saw the riverfront market achieve a median sale price of $700,000 – 59% higher than the non-riverfront market which recorded an average sale price of $439,750.
Over the past ten years, riverfront apartments have, on average, been 78% more expensive in terms of sale price than their non-riverfront counterparts. The largest price differential was seen during the six months to September 2008, where riverfront apartments were almost triple the price of those apartments not sold on the river.
Historically speaking, waterfront apartments in Inner Brisbane have achieved higher capital growth than their non-waterfront counterparts. Since 1990, waterfront apartments have, on average, achieved higher levels of capital growth 18 out of the 25 years. However, the effects of the 2011 floods have clearly been felt in this market segment. The chart below shows capital growth in waterfront apartments reaching its nadir of 1.2% during 6 months to September 2011, down from 4.3% in the preceding six-month period. It is worth noting that capital growth had been steadily declining across the Brisbane market in the years leading up to the 2011 floods due to falling dwelling values caused by the GFC. The most recent six-month period ending March 2015 resulted in waterfront apartments achieving 3.2% capital growth.
Recording 25% of total waterfront sales activity, Kangaroo Point achieved the highest volume of sales over the past 12 months driven by an established high-density market. Of note is the rise of the West End waterfront apartment market (17% of total transactions). West End, has seen a significant increase in the level of sales activity over the past 18 months. A region which has significant opportunity has been underdeveloped for a long period of time, is now establishing itself as a market which will provide a riverfront lifestyle for Brisbane residents.
So if you’re in Sydney, you buy a shiny, glass-bound apartment that sits harbour-side. In Melbourne, you scout a refurbished industrial complex down a nondescript laneway. In Brisbane, however, the river is king. Our city has been shaped by the Brisbane River. Historically it was the source of trade and commerce within Brisbane and today, the city is literally shaped by the river, following its meandering course from Moreton Bay to Moggill. The waterfront apartment market in Brisbane is well-established and represents some of Brisbane’s most luxurious residences. Place Advisory has continually noted that high-end apartments will be a growth market in Brisbane towards the end of 2015 and throughout 2016. There are opportunities for growth here. As owner-occupiers return to the market and the strength of the Brisbane recovery results in developers having the confidence to construct larger, better-appointed dwellings in premium locations. Our market is cyclical. Waterfront property is the one to watch!
This story was written by Lachlan Walker of Place Advisory and originally appeared at www.stateofplace.com.au