Developers abandon investment market in favour of owner-occupier buyers

The tide has turned with developers now focusing on bigger but fewer apartments in what the Real Estate Institute of Queensland says is a welcome and due change of direction.

The Real Estate Institute of Queensland said a trend in developers wanting to drastically alter approved projects to create more owner-occupier stock is a natural market correction.

Developer Gardner Vaughan Group wants to slash in half the number of one and two bedroom units for their approved 10 storey Lambert St, Kangaroo Point project.

The ‘minor change’ application to the Brisbane City Council includes reducing the number of one bedroom units from 10 to five and two bedroom units from 9 to four.

In exchange, there would be 13, instead of eight, four bedroom apartments.

An artist impression of the 10 storey apartment block a developer wants to drastically alter the lay out of, to have fewer one and two bedroom apartments in favour of four bedroom units in Lambert St, Kangaroo Point. Pic: BCC/Hayes Anderson Lynch Architects

The changes follows an application by a Chinese developer in May to make sweeping alterations to an approved 239 unit tower in South Brisbane.

Instead of 187 one bedroom units, there would be just 10. The number of two bedroom units would basically triple to 152 while overall there would be 50 fewer residences.

REIQ ceo Antonia Mercorella said the demand for owner-occupier stock had increased and developers were naturally reacting to a shift in the market place.

“It’s not unexpected that we’re starting to see developers pivot towards where the new demand levels are,” Ms Mercorella said.

“Owner-occupiers are becoming more prevalent in the apartment market as investors and one-bed units reach their peak.”

REIQ chief executive Antonia Mercorella says the change in direction towards larger, owner occupier units is a natural correction in the property market. Picture: Courier-Mail

She said was more or less an untapped market and one developers seem now to turn their attention due.

The return of the Morrison Government, which has promised to assist first home buyers get into the market, may also play a role in developers producing more owner-occupier stock.

“Now that the demand levels from investors have been sated it’s a natural progression that developers look to the next untapped market, which is owner occupiers,” she said

“Inner city living is increasingly popular and now that the Morrison Government has promised to help first home buyers get into the market we expect we’ll continue to see confidence rising in that demographic.”

Developer Gardner Vaughan Group wants to alter the layout of an approved 10 storey building to have fewer one and two units but more bedroom units because an increased demand for owner occupier residences. Picture: BCC/Hayes Anderson Lynch Architects

The Gardner Vaughan Group said the developments, which was approved last November, said the changes were a response to property market research and a “reduced purchaser interest in 1 and 2 bedroom units”.

“Given that the subject development seeks to respond to this under supply of larger units in the locality, the revised unit mix in the building should be supported,” the application stated.

“It is considered that the proposed unit mix will provide an improved diversity of accommodation options in the locality, primarily by providing an increased number of larger ‘family-sized’ apartments.