Brisbane’s over-supplied market for high-density apartments had been suffering prior to the 2017 regulator-driven lending curbs and Queensland’s own foreign buyer surcharges. However, the loss of foreign investors who accounted for a quarter of NSW and Victoria sales has only slowed the market further.
“We’re going to see some pretty big declines in the first half of this year ,” BIS Oxford Economics Managing Director, Robert Mellor told The Australian Financial Review. “All the stories I hear from developers are that it’s been pretty bad, and they’ll be struggling to get projects to commence because of a lack of pre-commencement sales.”
Official figures indicate that over the year to December 2017, approvals of new apartments, townhouses and semi-detached dwellings fell 10.8 percent to 103,417 from 115,976. This followed a 3.7 percent decline in 2016 from 20,266. With commencements of private-sector high-density apartments predicted to fall more than 40 percent from the market peak to December 2020.
However, the decline in high-rise apartments, does not necessarily reflect a stand-still in the multi-residential sector – with ‘medium-rise’ developments predicted to increase over the coming year.
While commencements of private-sector high-density apartments were likely to fall 13 per cent in the year to June  to about 55,000, medium-density dwellings were likely to rise 12 per cent to 44,000, according to Mr Mellor.
Adding “regulatory and tax measures curbing investor demand should be eased within the following three years to prevent a housing shortage at a time of a growing rental population”.