The apartment oversupply question in Brisbane continues to be a talking point. In reality it is more of the same. There cannot be too much going on in the media when “smashed avocados” is a major story.
I have not seen anything across my desk to contradict my view that, in Brisbane, it will mostly be a building by building issue. Certain hot spots will continue to remain in issue.
Applications for finance continue to roll in at GPS. Due to the pull back by the banks and difficulties in achieving pre-construction presales we are able to be even more selective in the loans we will fund. It is also more of the same for what we are looking at funding. Existing residential areas, good amenities, proximity to services, marketable design etc. Good product in the right area will continue to sell.
I remain ambivalent towards presales and believe they may prejudice achieving the right valuation figure. They may also be buying settlement risk. I continue to have difficulty in comprehending why a purchaser would buy off the plan, for an apartment or townhouse in Brisbane, when there is so much stock currently available and the poor prospects for capital growth in the next 12 months.
While GPS remains open for business we have set a cap on lending. If you would like us to have a look at financing a project, then please contact us so we can “pencil” the project into our loan pipeline.