The apartment-building splurge is starting to dampen prices, with Melbourne, Brisbane and Canberra all recording declines in the first quarter, Domain Group figures show.
The market for houses remains stronger and in Sydney, lack of supply and investor demand continued to push prices of both houses and apartments higher, but diminishing returns may be kicking in for the buyers of apartments in Melbourne and Brisbane, where an oversupply has already been forecast by analysts BIS Shrapnel. Others, such as Urbis, say oversupply is unlikely in Brisbane.
Melbourne apartment prices slipped 0.3 per cent lower to $434,436 in the three months to March from the previous quarter, while they fell 2.3 per cent in Brisbane and 3.6 per cent in Canberra. While it was the first quarterly dip in apartment prices in the Victorian capital, it was a continuation of a fall in Brisbane, where the median price of $354,246 is 3.8 per cent below its value of a year ago. Canberra's median apartment price of $399,080 is 3 per cent lower, year on year.
The pipeline of new apartments remains strong. Victorian authorities approved 3387 new apartments in February, a three-month high. Even though approvals by local authorities in Queensland nearly halved to 1730 from 3118 in January, apartments are likely to make up almost half of the 200,000-plus new dwelling approvals this financial year and next, Deutsche Bank said this week.