Capital city apartment development diverges as affordability drives sales in Sydney and Melbourne
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Apartment sales trends in Australia’s major cities have split into two distinct markets, according to the latest Apartment Essentials report from urban planning consultancy Urbis.
The report, which surveyed over 162 apartment projects nationwide, revealed a surge in affordable apartment sales in Sydney and Melbourne during the second quarter of 2024, while Queensland markets maintained their focus on premium properties.
Paul Riga, director at Urbis, described the situation as “a tale of two markets”, with Sydney and Melbourne’s top-selling projects skewing “more affordable”, while “Brisbane and Gold Coast markets are still targeting the luxury/premium market”.
Urbis reported 1,112 apartment sales in Q2 2024, with an average presales and construction price of $1.3 million nationally.
Brisbane recorded the highest average apartment price at $2.2 million, followed closely by the Gold Coast at $1.8 million.
Sydney’s average apartment price of $1.1 million ranked third, significantly lower than the Queensland markets.
The report highlighted the increased proportion of one-bedroom apartments sold in Melbourne, Sydney and Perth compared to the luxury products on offer in Queensland.
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Owner-occupiers continued to dominate the off-the-plan apartment market, accounting for 70 to 80 per cent of sales in Sydney, Melbourne and Inner Brisbane.
Perth and the Gold Coast saw slower owner-occupier sales, at 48 per cent of total sales.
Foreign investor demand remained comparatively subdued across all markets.
The price per square metre for presales and under-construction apartments rose to just over $14,000 nationally in Q2 2024.
Inner Brisbane and the Gold Coast emerged as the two most expensive markets, with prices of $18,000 and $17,000 per square metre respectively.
Sydney’s apartment development has concentrated in the western suburbs, where Mr Riga noted increased infrastructure and opportunities to “deliver affordable apartments with greater connectivity”.
Urbis’ Rental Intelligence Dashboard, monitoring rents from 19,000 listings across approximately 1,700 projects, showed continued rental growth in Q2 2024, albeit at a slower rate than previous years.
The national average weekly rent for a completed existing apartment in Q2 2024 was $700, with Sydney the most expensive market at $800 per week, followed closely by the Gold Coast at $798 per week.
However, rental growth has moderated, with the 7 per cent national growth over 2023 to Q2 2024 falling short of the 20 per cent growth recorded from 2022 to 2023.
Mr Riga noted that while rental growth for new apartments was stronger in Sydney and the Gold Coast, it has begun to moderate in Inner Brisbane, Melbourne and Perth.