Filtering by Tag: Brisbane Apartment Market

Debunking “Brisbane City Council Ban on Townhouses and Apartments No Way To Tackle City’s Biggest Problem: Urban Sprawl”

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The following is an article recently penned by Jorge Branco and published by Domain. It is one opinion and as a property economist, I sought to express my own in contrast to it. The article Jorge wrote is in italics, my comments are made in plain text.

Brisbane City Council is on a crusade to “protect the Brisbane backyard”. In those terms, the council’s bipartisan push to ban townhouses and apartments in low-density suburbs seems almost noble.

The simple reality is that Council is in fact protecting land uses that were designed for detached housing given the relaxation and often poor outcomes that occurred during the most recent investment cycle. Council is not banning apartments and townhouses, it is simply enforcing where they can and can’t go. Some might argue from a property economics perspective that this actually creates certainty in the market place. It protects the asset values of some housing, whilst also ensuring that affordability in those low density areas does not get inflated by developers that can pay more for a site than a Mum or dad purchaser, let alone a first home buyer. I suspect you will find that many suburbs actually have a mix of low density and higher density land uses throughout.

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If Apartment Values Fall, So Will Housing ... Simultaneously

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There has been so much speculation around the apartment market and how it could impact the broader housing sector, however history tell us that this hasn't been the case in the past since 2003. The data actually demonstrates that the apartment market and housing market typically move as one, a really important consideration if you believe there will be an uplift or a fall. Often there is the expectation that every cycle is different, but that is hardly the case in property. Developers build too much on the back of confidence, they stop building and the market catches up, reaches equilibrium for a short period of time and then we over build again and hence the cycle starts all over. If it didn't, then the notion of the "property clock" would cease to exist.

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