Property consultancy Charter Keck Cramer has released insights from its Brisbane State of the Market report on the Build to Rent and Build to Sell apartment markets for H2 2023.
The research across all states has shown that throughout 2023, the conditions across the Build to Rent and Build to Sell apartment markets remained difficult and continued to challenge the industry.
According to the report, investor’s weighted average cost of capital (WACC) requirements has increased due to rate rises, increased construction costs, and the fact that there is a low appetite to take on development risk – especially within planning and construction – under the current conditions. However, foreign institutional capital is now considering Brisbane as a Tier 1 city, alongside Sydney and Melbourne.
Charter Keck Cramer anticipates more capital to be attracted to the city in the lead up to the Olympic Games in 2032. The market is set to recover over 2024 and into 2025 as conditions stabilise and there is more market certainty and confidence.
Based on the substantial supply and demand imbalance, which has been building for several years now, the company predicts conditions to markedly improve at the point when rates enter a cutting phase and dramatically accelerate for the Build to Rent market.
Evidence in the report indicates that any projects getting out of the ground are being met with strong market acceptance and this will continue to play out over the next 12 months.
