Brisbane property investment analysts are tipping Brisbane as the capital city to watch in 2017 – they’ve actually been on about it for some time now. It’s also a classic example of radiating price movement from the southern capitals Sydney and Melbourne to Brisbane.
The inner- and near-city Brisbane suburbs comprise a mixture of gentrified ‘chic’ suburbs like West End, New Farm and Paddington, along with neighbouring suburbs that feature more family-style housing such as Ashgrove, Chelmer, Wilston and Bulimba.
The Brisbane property market would be considered a fairly predictable performer, but this isn’t a bad thing. Not only do these inner suburbs experience the upward cycle ahead of the mid- and outer-ring suburbs but they’re also considered less volatile – that is, they don’t tend to suffer the downturn that some of the outer lying suburbs can be subject to.
Supply for house-and-land property in these near-city suburbs is largely fixed. On the other side of the equation, demand from buyers for property within these locations is consistently firm because they offer reduced commute times to the city, as well as retail/commercial hubs and character-style housing.
So, there’s every chance the city will continue in this vein, Higgs says.
The inner city has seen good growth over the past 12 to 18 months, up to 20 per cent in some suburbs. This has started spreading to the middle ring, although activity in the outer areas is still lagging behind.
As to where the capital growth wave sits right now, Higgs believes it’s firmly within that five- to 10-kilometre ring. This means buying in suburbs at the outer edge of the ring offer the best opportunity for riding the swell. He recommends shooting for traditional housing styles in those locales.
Established dwellings within 10 to 14 kilometres of the CBD, with access to public transport and services, might be in the next growth wave, although with the market at present it may be more a medium-term proposition than a short-term one.
In Brisbane’s north, Northgate, Wavell Heights and Virginia have already experienced the ripple and are still achieving good growth, but being ahead of the wave means checking out suburbs like Aspley and Carseldine.
To the south, Sunnybank and Sunnybank Hills have seen good levels of demand over the past 12 to 18 months, so Eight Mile Plains and Runcorn are where the wave should next hit.
We have started to see the property market stabilise in some areas closer in, but as long as buyers keep a long-term view of the Sunshine State, capital growth benefits will follow.
If you’re hoping for a hot run in Brisbane, one of the numbers to track is interstate migration, with demand fuelled by jobs growth and, to some extent, housing affordability. This has failed to ramp up in recent years, which might explain the present state of affairs.
It must be remembered that interstate migration into southeast Queensland remains very low and for this reason it’s difficult to see the market experiencing any significant growth over the next 12 months. Brisbane’s opportunity may extend beyond 12 months with some potential for migration from the southern cities of Sydney and Melbourne as their markets become increasingly unaffordable.
Brisbane property investment is a conservative, steady and reliable market that has always been the poster city for the pebble-in-the-pond growth wave model. Plotting the APM numbers reveals a reasonably steady band of activity around the five- to six-kilometre mark right now.
Brisbane’s property market has always promoted its affordability in comparison to Sydney and Melbourne. You can buy a pretty nice home within jogging distance of the CBD and still pay substantially less than the price of a bedsit in Bondi Beach.
In a general sense, Brisbane had a disappointing 12 months leading into 2017. There was expectation the city would see much stronger growth across the board, but a lack of confidence and interstate migration didn’t help. Mind you, not all sectors are created equal, he says.
The pillar for the Brisbane market has been inner-city property over the past two years. Growth last year was particularly from property points within about two to six kilometres of the CBD.
This suggests purchasers are looking at the long-term advantages of being a homeowner, or even an investor, in the Queensland capital.
The traditional outer suburban affordability corridors haven’t performed as well as expected – areas such as Ipswich, Logan and the Moreton Bay regions. The problem is higher unemployment and a large supply of property in these areas, and they’re going to need a big pick-up in their local economies to restore confidence.
Opportunities remain for suburbs closer in – vacancy rates are fine and yields are above five per cent gross in many instances.
More information on property investment in Brisbane including recommended residential developments and suburbs is available in our free information pack