[ad_1]
Key takeaways
After booming through 2020 and 2021 with prices rising by 45.3%, Brisbane housing values fell -8.9% from their peak in May 2022 through to the recent trough in January 2023.
But the Brisbane housing market has clearly turned the corner in early 2023 with prices rising consistently – now up 13.1% since January 2023
In fact in Brisbane, house prices in nearly three out of four suburbs rose by 10 per cent or higher in 2023
And there are many signs that Brisbane will be one of the strongest housing markets in 2024 with firm indications that Brisbane property values and rents will keep rising strongly in 2024.
Hosting the 2032 Olympics will ensure that Brisbane is put on the global map and it has a unique lifestyle and economic benefits that will attract overseas migrants as well as plentiful jobs for highly paid knowledge workers.
Federal government forecasts suggest that Queensland’s population is expected to grow by more than 16 per cent by the time Brisbane hosts the Olympic Games in 2032.
So rather than trying to time your next property purchase based on where we are in the cycle, take a long view and if your income is secure and the time is right for you, this may be an ideal time to get a foothold in the Brisbane property market while others are sitting on the sidelines.
Are you wondering what will happen to the Brisbane property market in 2024?
Well… it’s no secret that Brisbane was one of the strongest property markets during the boom of 2020-21.
After booming through 2020 and 2021 with prices rising by 45.3%, Brisbane housing values fell -8.9% from their peak in May 2022 through to the recent trough in January 2023.
But the Brisbane housing market has clearly turned the corner in early 2023 with prices rising consistently – now up 13.1% since January 2023
In fact in Brisbane, house prices in nearly three out of four suburbs rose by 10 per cent or higher in 2023.
And there are many signs that Brisbane will be one of the strongest housing markets in 2024 with firm indications that Brisbane property values and rents will keep rising strongly in 2024.
As a further sign that the Brisbane housing market has is firmly in the recovery phase of the property cycle:
Sure each research house has slightly different stats, but any way you look at it Brisbane home prices basically recovered all the losses of the downturn in 2022 and have hot new highs.
Of course there are many sub-markets in Brisbane, with some strongly outperforming the averages.
Brisbane housing market insights
A few years ago Brisbane’s house prices saw the steepest annual climb in 13 years in 2021, as the city’s property market came to grips with relentless Covid-19-induced demand for property.
This once-in-a-generation property boom resulted in almost 400 suburbs joining the million-dollar club.
And even as growth slowed in other parts of Australia, Brisbane’s housing market continued to perform strongly in the first half of 2022, but then from June 2022 Brisbane house prices slipped back 11.0% from their cyclical peak until the market picked up again in February 2023.
Home prices have now surpassed previous peaks, and the city looks poised to end 2023 with an 8% increase in home prices.
Having said that the Brisbane real estate market was fragmented in 2023 with house prices rising more than $300,000 in Queensland’s strongest performing markets.
In fact the state’s 32 top-performing suburbs notched up between 20 and 30 per cent annual growth across unit or house sectors.
Brisbane’s median house value sitting at just 63% of Sydney’s suggests a powerful blend of growth and affordability, making the city an increasingly attractive option for investors.
Our on-the-ground experience at Metropole Brisbane is that there is emerging strong demand from both home buyers and property investors for A-grade homes and investment-grade properties.
Here is the latest median property prices for Brisbane.
Source: CoreLogic, 2nd January 2024
Why is the market so robust, you might ask?
Well, there has been significant internal migration (particularly northwards from Victoria and NSW) into Queensland with Australians looking for more affordable property in lifestyle suburbs.
But even though the north-eastern state remains one of the country’s most robust, if you’re looking to buy, you’ll be pleased to hear that you can get more bang for your buck in Brisbane compared to Sydney and Melbourne.
Currently Brisbane is benefitting from significant interstate migration.
Federal government forecasts in January 2023 suggest that Queensland’s population is expected to grow by more than 16 per cent by the time Brisbane hosts the Olympic Games in 2032.
And the population spread in Australia’s most decentralised state is tipped to sway towards the city, with most Queenslanders expected to live in Greater Brisbane by the time the Olympic flame is lit at the Gabba.
Greater Brisbane is expected to grow faster than the rest of Queensland, with a rate of 1.9 per cent projected for the capital in 2022-23, compared to 1.4 per cent for the rest of the state.
Growth was expected to slow slightly in 2032-33 to 1.3 per cent in Brisbane, compared to 1.2 per cent across the rest of Queensland.
As of 2021-22, most Queenslanders – 50.66 per cent – lived outside Brisbane, but the forecast growth rates were expected to result in 50.06 per cent of Queenslanders living in the capital by 2032-33.
Brisbane will be home to 3.082 million people, while 3.075 million were projected to live elsewhere in Queensland.
Here’s what’s happening to Brisbane property values:
These are the latest Brisbane home prices charts from Corelogic
Source: Corelogic – December 2023
Brisbane house prices forecast
Of course, there is no “one” Brisbane housing market and it’s a bit like having one hand in a bucket of hot water and the other in a bucket of cold water and saying:
On average I’m feeling comfortable.
Digging deeper into the stats some properties have far outperformed others and freestanding Brisbane houses within 5-7 km of the CBD or in good school catchment zones have grown in value strongly.
It’s really a tale of two cities – while some properties over perform, others underperform.
Recently Westpac has forecast that by 2025 Brisbane would have gone through five years of spectacular real estate growth of about 43 per cent.
By comparison, Sydney would achieve 36 per cent and Melbourne 33 per cent.
Underlining just how extraordinary the market has been, Westpac’s senior economist Matthew Hassen revised its expectations for this year for 7 per cent growth nationally, up from zero.
Brisbane house prices were expected to jump 6 per cent his year.
Brisbane’s property market trends
The strong demand for detached houses in Brisbane, particularly in the inner and middle ring suburbs, and outstanding demand for lifestyle areas, are likely to lead to these locations outperforming cheaper properties in outer suburbs.
At the same time, demand for apartments is likely to remain softer, but more and more Queenslanders are turning to townhouses in Brisbane’s inner suburbs as a preferred style of accommodation.
Of course, while some locations in Brisbane have strong growth potential, and the right properties in these locations will make great long-term investments, certain submarkets should be avoided like the plague.
It’s likely that some of the high-rise apartment towers in and around Brisbane’s CBD, which were already suffering from the adverse publicity of structural problems prior to Covid-19, will now become the slums of the future as they are shunned by homeowners and investors.
Like after every downturn, moving forward there will be a flight to quality properties and an increased emphasis on liveability.
As their priorities change, some buyers will be willing to pay a little more for properties with “pandemic appeal” and a little more space and security, but it won’t be just the property itself that will need to meet these newly evolved needs – a “liveable” location will play a big part too.
To many, liveability will mean a combination of:
- Proximity – to things like parks, shops, amenities, and good schools
- Mobility – access to good public transport (even though this may be less important moving forward) or a good road system
- Access to jobs
The bottom line is that for those with a secure job and who have their finances under control, now is still a great time to buy into the Brisbane housing market.
Currently, due to a short supply of A-grade homes and investment-grade properties, and a surplus of buyers, the quality property is a seller’s market where asking prices could just keep rising.
Not only have certain locations grown in value, but Brisbane has also seen a distinct outperformance of house values relative to units.
As you can see “Asking Prices” are rising for all types of Brisbane properties and these are a leading indicator, meaning sale prices will rise a few months down the track,
Source: SQM Research
Brisbane housing market drivers
There were multiple factors that contributed to the demand surge seen across its property markets, Queensland is unique in that its housing markets are being boosted by soaring interstate migration with many Aussies migrating north (mostly out of NSW and Victoria) in search of lifestyle suburbs as well as getting it’s fair share of international migrants.
Affordability is another key driver.
Another appeal of housing markets across Brisbane and the rest of Queensland is that values remain relatively low, particularly relative to the housing values across the other east coast cities of Canberra, Melbourne, and Sydney.
And it is likely Brisbane’s more affordable house prices and great lifestyle will keep attracting both interstate and overseas migration.
Brisbane’s rental market
Brisbane’s rental market is currently a landlords’ one with asking rents at historical highs.
In fact currently Brisbane’s rental market is in crisis with just not enough properties to lease.
The city has seen many people are moving to Brisbane in recent years to take advantage of job opportunities and high quality of life.
This has led to an increased demand for rental properties, which has helped to keep the vacancy rate low.
While the current vacancy rate in Brisbane may be good news for landlords, it can be a challenge for renters who are looking for affordable housing.
With a low vacancy rate, there may be fewer rental properties available and more competition for those that are on the market.
At Metropole Property Management we are able to achieve very fast leasing of properties at premium rentals, in part because our clients have chosen investment-grade properties, but we’d like to think it also has a bit to do with our proactive property management policies.
Brisbane’s rental yields
Source: SQM Research January 2024.
Brisbane school zones for house price growth
In Brisbane, competition for places in preferred school zones has pushed property prices skywards in some areas.
And with Brisbane’s elite private schools charging up to $28,230 per year, per child, it’s understandable that top-performing public schools are in high demand.
Like many other major Australian cities, many parents and savvy investors have crowded the Brisbane property market looking for some of the topmost sought-after school zones.
Demand in these school zone hotspots has skyrocketed as both property buyers and investors look to get into these markets.
Domain’s chief of research Nicola Powell said the pandemic had helped supercharge school catchment prices with flexible working allowing young families to relocate to suburbs with easy access to beaches, parks, and schools.
“It’s astonishing to see that starting on a high base of house prices, one-in-10 school catchment zones are achieving 10 to 20% more than the suburb they are located in,” Powell said.
We know that as part of the property decision-making process, parents and investors consider the geographical location of a potential property in relation to a school catchment zone.
When people are looking for a home, they’re looking for a lifestyle, and education is a big part of that picture, be it in the inner-city suburbs or the coastal regions of Australia.”
Powell explains that the boundary of a public school catchment is often a critical factor when it comes to purchasing a family home.
In Brisbane, secondary school catchments appear to have a more positive impact on house price growth compared to primary school catchments.
The Domain School Zones Report explains that…
- House prices have risen across most school catchments analysed, up in 92% of primary and all secondary schools, aligning with the rising property market and increased popularity from interstate movers.
- While the top school catchments were dotted across Greater Brisbane suburbs and a variety of different price points, affordable outer locations dominated the list.
- House price growth varied between neighbouring school zones. House prices in Tullawong State High School catchment jumped 21% annually, while the neighbouring school catchment of Caboolture State High School increased at a fraction of this rate, at 6%.
- A larger proportion of secondary school catchments outpaced the respective suburbs’ performance, at 56% compared to 54% of primary schools.
- One-third of school catchments had up to 10% additional annual growth above the respective suburb location. Roughly 15% had 10-20% additional house price growth over the suburb growth.
READ MORE: Top 10 Brisbane school zones for house price growth
Overview of Brisbane’s capital growth
Like Australia’s other large capitals, the more expensive properties in Brisbane are outperforming middle and lower-price properties with regard to capital growth.
Moving forward, houses in Brisbane’s inner and middle-ring suburbs offer the best prospects of long-term capital growth as this is where there are more skill level 1 workers – those who earn higher incomes, often having multiple sources of income.
The fact is, the rich are getting richer and they are able to and prepared to pay more for their homes.
Brisbane apartment market overview
Apartment living in Brisbane came late to the party compared to Sydney and Melbourne and, in general, houses make better long-term investments than apartments in Brisbane.
But now there is a mismatch between demand and supply.
CBRE estimates Brisbane’s apartment delivery will average 6,500 pa over 2024-28.
Demand for apartment stock is likely to average 16,500 pa over the next 5 years.
This should continue to drive down city-wide vacancy from 1.1% to 0.8% and keep rents rising.
Is it the right time to invest in Brisbane’s property?
When people look back at 2023 they will realise that it was the year when the Brisbane property market reset.
Buyers and sellers are beginning to realise that inflation is under control and that interest rates have most likely peaked and they are stepping back into the market.
Of course, the Brisbane housing market won’t boom again like it did in 2020-21 any time soon, but anyone who buys an A-grade home or investment-grade property in Brisbane will look back in a couple of years’ time and recognise they bought a bargain.
Now I know some home buyers are asking:
How long can this last? I heard the Brisbane property market will crash in 2024!
They must be listening to those ‘perma bears’ who have been telling anyone who is prepared to listen that the property markets are going to crash.
But they have said the same year after year… they have been wrong in the past and will be wrong again this time.
Property markets move up and down cyclically and while the short-term trends may be flat or downwards, the long-term trend has always been up.
But while overall our economy is performing soundly, consumer sentiment – both fear and greed – tends to drive the property markets, and at the moment both buyer and seller confidence is fragile in the face of all the negative media.
This means that many discretionary Brisbane home buyers and sellers are just sitting on the sidelines.
On the other hand, strategic investors and home buyers with a long-term view are taking advantage of this window of opportunity which will close when the average home buyer and investor realise that the Brisbane housing market bottomed in the first quarter on 2023.
But few A-grade homes are currently on the market leaving property buyers with less choice.
At the same time, Queensland is currently the fastest-growing state in Australia driven particularly by interstate migration.
And the demand for lifestyle areas and extremely strong demand for detached houses in Brisbane, particularly in the inner and middle-ring suburbs, will underpin property values.
In Metropole’s Brisbane office we are noticing more investors are getting into the Brisbane property market recognising that while there are no bargains to be found, in 12 months’ time the properties they purchased today will look like a bargain.
Similarly, popular areas of the Gold Coast and Sunshine Coast have enjoyed strong demand considering the increased flexibility of being able to work from home and commuting to the big smoke less frequently.
Property investor activity has been strong, particularly for houses, not only coming from locals but from interstate investors who see strong upside in Brisbane property prices as well as favourable rental returns.
But be careful…
Note: There is not one Queensland property market, nor one south-east Queensland property market, and different locations are performing differently and are likely to continue to do so.
Houses and townhouses remain a firm favourite of prospective home hunters, however, apartment demand has been picking up too but, in general, apartments in Queensland are a higher risk investment than houses, particularly due to the fact that many apartments are unsuitable for families or owner-occupiers.
However with rising building costs, new apartments are going to cost developers a lot more to get out of the ground and therefore eventually cost more in the marketplace which means there is intrinsic equity in established Brisbane apartments and townhouses.
At the same time, affordability issues will push what would have been a buyer of a detached home back into the unit market.
Just to make things clear, in this article I’m generally talking about the Brisbane housing market – not the Queensland property market which is a very different animal.
And then there are multiple markets in the diverse sprawling city of Brisbane; divided by geographic location, price point, and property type.
If you’ve been following my property investment strategy, you’ll know I only invest in capital cities and that’s why I avoid the Sunshine Coast, the Gold Coast, and Queensland’s regional markets which have very different (and fewer) growth drivers than Brisbane and are therefore more volatile.
So back to the question “Is it the right time to get into the Brisbane property market?”
Anyone who buys an A-grade home or investment-grade property in Brisbane now will look back in a couple of years’ time and recognise they bought a bargain, as the Brisbane market is well into the upturn stage of its property cycle.
There is a perfect storm of positive growth drivers that will have Brisbane house prices continue to perform moving forward with strong demand from a growing population, increased jobs creation, rising wages and an undersupply of properties.
And no doubt Brisbane hosting the 2032 Olympic games will underpin strong infrastructure growth, economic growth, and population growth over the next decade.
This suggests that South East Queensland will continue to be a preferred destination for many Aussies from interstate due to lifestyle, health, and affordability reasons.
But, as I have explained, there are multiple housing markets within Brisbane, based on price point, geography, and type of property and as always, you can’t just buy any property and count on the general Brisbane property market to do the heavy lifting over the next few years, so careful property selection will be critical.
5 reasons to invest in Brisbane’s real estate
1. Brisbane’s demographics and population growth
The current metro area population of Brisbane in 2023 is 2,505,000, a 1.33% increase from 2022.
The metro area population of Brisbane in 2022 was 2,472,000, a 1.35% increase from 2021.
The metro area population of Brisbane in 2021 was 2,439,000, a 1.37% increase from 2020.
In 1950, the population of Brisbane was 441,718.
According to the Intergenerational Report, the population of Australia is expected to almost double by 2055, with Queensland also becoming home to more than seven million people over the next 40 years.
Brisbane is home to a diverse population of people from a variety of different cultural and ethnic backgrounds.
In 2021, approximately 25% of the population was born outside of Australia, with the largest number coming from New Zealand, the United Kingdom, and China.
Its multicultural population adds to the city’s rich history and cultural fabric, making it a unique and exciting place to live and visit.
The city has a relatively young population, with a median age of 36 years.
Given its sub-tropical climate, the region is well known for its laid-back lifestyle and enviable weather.
Greater Brisbane also has far more affordable property than the southern cities of Melbourne and Sydney.
There are a number of other factors that have contributed to Brisbane’s population growth.
One major factor is the city’s strong economy, which has attracted many people to the area for work and business opportunities.
Brisbane is home to a number of major industries, including finance, healthcare, and education, and it has a diverse and growing economy.
Underpinned by continued overseas and interstate migration, metropolitan Brisbane requires approximately 23,000 additional dwellings each year to accommodate its growth.
2. Brisbane’s layout
Brisbane is a sprawling city with outlying suburbs up to one hour’s drive from the city centre.
Sprawling along the Moreton Bay floodplain, Brisbane stretches from Caboolture in the north to Beenleigh in the south, and as far as Ipswich in the west.
Winding around the Brisbane River the city is rather hilly, with prominent rises including Mt Coot-tha, Enoggera Hill, Mount Gravatt, Toohey Mountain, and Highgate Hill to name a few.
The Central Business District itself is fairly well laid out but it can be tricky to navigate through all one way.
If you ever get confused, a golden rule for the CBD is that the streets with female names (Margaret, Ann, Queen, etc.) run parallel to each other and the streets with male names (Edward, George, etc.) also run parallel to each other.
The CBD is still in the original settlement location in a curve of the river about 23 kilometres upstream from Moreton Bay.
The river acts as a natural divide with the city colloquially broken into two sections, namely “north of the river” and “south of the river”.
The inner ring of the suburbs of Brisbane is classed as between zero and five kilometres from the CBD, the middle ring from five kilometres to about 12 kilometres, and the outer ring from the point to the start of the borders of Greater Brisbane’s regional councils.
In spite of the hilly areas of Brisbane, much of the city exists on the low-lying flood plains, with several suburban creeks throughout the suburbs joining the Brisbane River.
These low-lying areas on the water’s edge increase the risk of flooding.
3. Brisbane’s infrastructure
Infrastructure spending can be the most powerful force in residential real estate. It can transform local economies and generate real estate booms.
Major infrastructure projects can elevate the appeal of locations by improving the accessibility or amenity of an area and they can also generate economic activity and jobs during construction.
For Brisbane, the Gold Coast, and the Sunshine Coast news that the city will host the 2032 Olympics has put pressure on the need for upgraded infrastructure and transport.
Moving forward Greater Brisbane will benefit from a flurry of major infrastructure projects including:
- Cross River Rail ($5.4 billion) is a new 10.2-kilometre rail line between Dutton Park and Bowen Hills, with 5.9 kilometres of twin tunnels beneath the Brisbane River and the CBD
- The Gabba Redevelopment – Value $2.7 billion
- Brisbane Live ($2.5 billion) Located at a key CBD transit hub, a new 18,000 seat entertainment arena complex will be serviced by underground rail and busway infrastructure.
- Queens Wharf
- The Brisbane Metro ($1.244 billion) will be an important part of Brisbane’s larger transportation network, which will connect the city to the suburbs.
- The New Queensland Cancer Centre – Value $750 million
Also already underway is the duplication of the M1 linking Brisbane to the Gold Coast which currently struggles with heavy traffic.
The State and Federal Governments have pledged $2.16 billion toward the Coomera Connector – which will be a 45-kilometre six-lane motorway linking Nerang on the Gold Coast to Loganholme within Logan City.
Another big project under construction is the $1.5 billion Westfield Coomera Town Centre, which expects to create 1,200 jobs during construction and around 3,300 jobs per year once fully operational.
While new infrastructure is an important element for investors to consider, it doesn’t necessarily lead to property price increases and sometimes can be detrimental to an area through increased traffic, noise or pollution.
4. Brisbane’s economy
Brisbane is Queensland’s economic engine room – a growth city with a strong history of economic performance and significant infrastructure investment.
All the economic key pointers are heading in the right direction.
Brisbane’s economy is being underpinned by major projects like Queen’s Wharf, HS Wharf, TradeCoast, Cross River Rail, the second airport runway, and the Adani Coal Mine, but jobs growth from these won’t really kick off for a few more years.
Despite global uncertainty, the economy is predicted to be worth more than $217 billion by 2031, according to the Brisbane City Council Economic Development Plan 2012-2031.
5. Brisbane’s culture
Given its sub-tropical climate, Brisbane is well-known for its outdoor lifestyle, especially the plethora of dining options along the Brisbane River in residential and restaurant precincts such as Teneriffe, Bulimba, New Farm, and West End.
Brisbane is no longer a “big country town” in fact it’s a veritable hotbed of cultural and creative offerings, festivals, and events, according to experts.
Exclusive blockbuster exhibitions and inspiring theatre productions sit alongside independent and emerging local performances, outdoor cinema, street art, and intimate gallery and performance spaces.
Lovers of comedy, musicals, live theatre, and dance head to the Brisbane Powerhouse and QPAC.
The Queensland Museum and QAGOMA offer free entry to permanent exhibitions.
Fortitude Valley and West End are go-to destinations for local live music gigs and DJs, while international acts visit the Brisbane Entertainment Centre or Suncorp Stadium.
And while Brisbane is Australia’s third-largest city, tenants don’t necessarily want the same features as renters in Sydney and Melbourne.
The most promising Brisbane areas
So where in Brisbane should an investor start looking?
Like everywhere else in Australia, the Brisbane property market will be driven by demographics – where people want to live, how they want to live, and how much they can afford.
That’s why I only invest in areas where the locals’ income is growing faster than the national average.
These tend to be the “established money” areas or gentrifying suburbs.
Think about it… in these locations, locals will have higher disposable incomes and be able to and should be prepared to pay a premium to live in these locations.
Many of these locations in Brisbane are the inner and middle-ring suburbs which are gentrifying as these wealthier cohorts move in.
There are great investment opportunities in these suburbs in houses and townhouses.
And now, the post-Covid neighbourhood will be more important than ever – something people call the Third Place.
Our first place is home and our second place is work or the office, but during Covid, for many around Australia, the ability to go to a third place was taken away.
It may be a favourite café, a gym or a place of worship, and even local shops and pubs.
They missed that feeling and connection to others, having an outlet to take a break from family or colleagues for a short period to reset.
A gym or exercise centre has been substituted for a favourite walking or cycling path with green space and fresh air.
So, all these features combined will be a major requirement and will create huge demand moving forward.
These are all features of the 20-minute neighbourhood, which will be built around convenience.
Wouldn’t it be nice if all the things you need in a day would be just a short walk away?
In urban planning circles, it’s a concept known as the 20-minute neighbourhood.
Understanding these factors forms part of the research data we use at Metropole to help our clients find investment-grade properties or A-grade homes for owner-occupation.
If you’d like to get the independent, award-winning team at Metropole on your side to help you through the maze of mixed messages about the Brisbane property market, please click here and leave us your details.
Overall the various suburbs in Queensland show a dramatic range in performance, highlighting both the diversity in housing stock around the state and no doubt that the next twenty-five years will show an equally diverse result.
There’s no doubt that proximity to popular education catchments influences property prices in Brisbane.
This is true of both primary and secondary school catchment zones, which have in general outperformed the market and are likely to continue to do so.
Education is a long-term consideration and, whether you are planning a family, have children already enrolled in school, or are an investor looking to attract long-term, quality tenants, it may be beneficial to consider school catchment zones when you are determining suburbs of interest.
Tips: Look for Brisbane’s best properties in the inner and middle-ring suburbs
Suburbs close to the city centre generally perform better than all others over the long term.
Our research at Metropole Brisbane shows that (in general) properties closer to the CBD and closer to water increased in value faster than those further from the CBD and further from water.
And this general trend has again been confirmed by a paper by the Australian Housing and Urban Research Institute, which found that both in percentage terms and in absolute terms over the long haul suburbs located reasonably close to the CBD, where demand is high, close to employment and where the most people want to live and where there’s no land available for release, outperformed the outer suburbs.
One of the significant changes to occur in Australian cities over the past 50 years, and which has pushed up inner- and middle-ring suburb property values, is gentrification.
Interestingly this wasn’t caused by deliberate planning policy but resulted from a set of demographic changes that have occurred in most major capital cities around the world.
The exodus of industry, migrants, and many workers made way for gentrification of our inner suburbs where initially house prices and rents were cheaper than in the suburbs.
Later, our changing demographics with declining household size, in part because we were getting married later and having fewer children, meant that small inner suburban dwellings or apartments provided ideal accommodation for the expanding cohort of professionals who worked in or close to the CBD.
Gentrifiers were initially drawn to these inner suburbs by the diversity of jobs, educational opportunities, and lifestyles, and this trend continues today as more and more Australians are swapping their backyard.
1. The entry-level suburbs
Budgets starting $800- $850,000.
Yes, my Sydney and Melbourne friends, it is possible to buy a house within that budget!
We have been buying in Keperra and Chermside West now for a number of years and for a number of reasons.
These suburbs sit around 9-10km from Brisbane and are the furthest out we recommend buying.
Let’s take a look at some of the data:
Keperra
The appealing thing about Keperra for us comes down to demographics.
Firstly, nearly two-thirds of people own or are paying off a mortgage, a high owner-occupier percentage.
Weekly Family Income has continually hovered above the Queensland average but in recent years, it has started to move even further ahead.
The most common Occupation in this location is Health Care and Social and according to the Queensland Government, this is going to be the fastest-growing sector in Brisbane over the next few years and with our aging population, there will always be work.
These higher incomes and job certainty, mean that people will have more to spend on their homes and be much more comfortable in doing so.
Adding to that, Keperra is also a train station suburb and according to Matusik research, suburbs close to rail have grown 40% more in value over the last decade in Brisbane.
In the last 5 years, while Brisbane has averaged around 25%, Keperra has almost 30% in the same time.
The future is bright and if you know where to find the superior pockets, you will be handsomely rewarded.
Chermside West
Chermside West has very similar demographics.
Income and Occupation are very similar and the owner-occupier percentage is almost 80%!
We are seeing this suburb really gentrifying as social housing and retirees move out, they are being replaced by younger professionals who are targeting the nearby Craigslea State School catchment.
The suburb also boasts two hospitals that draw health care professionals to the area and it benefits from the development of neighbour Chermside into a type of Satellite City.
While many investors are attracted to Chermside, we would prefer Chermside West, with its favourable Demographics, higher owner occupier percentage, and superior school zone.
You also get all the benefits of all the Chermside upgrading without having a high rise and business on your doorstep.
The numbers tell the story here also with a rise of 36% over the last five years, well above the Brisbane average.
Other Entry-level suburbs to keep an eye on:
- Stafford Heights
- Mitchelton
- Everton Park
2. The middle-ring suburbs
Budgets starting from $900,000+
Starting to get closer now and there are a number of good suburbs that sit around 6 or 7km to the Brisbane CBD.
Our pick currently is Cannon Hill.
Here is some of the research:
Cannon Hill
Weekly incomes in Cannon Hill have soared dramatically over the last few decades.
From almost being level with the Queensland average back in 1991, the last decade has seen a dramatic increase in wages and our expectation is that this will continue.
Again, it has a greater level of owner-occupiers with around 70% either paying off a mortgage or owning their property outright.
It also has a lot of the tick boxes a family is looking for with access to good schools, green space, a bus and train line, and easy access to our bugger employment hubs.
There is also a big trend to low maintenance living and with many bigger blocks having been subdivided over the years, the land is now at a premium.
We have chosen Cannon Hill for its access to our ever-expanding CBD, but also is the closest southern suburb to benefit from the Brisbane Airport precinct expansion.
The suburb has also seen around 30% growth over the last 5 years on average.
Other middle-ring suburbs to keep an eye on:
- Holland Park
- Tarragindi
- Toowong
- Kedron
3. The bulletproof 5km ring
Budgets starting from $1.1 million
Suburbs within the 5km ring are starting to resemble all the traits and pricing of some of our southern capitals, but one suburb that still offers value is Ashgrove.
Ashgrove is around 4km from the Brisbane CBD and has an excellent reputation for being a popular family suburb.
Here are some of the data:
Ashgrove
The demographics and Incomes here are increasingly very strong, with many in the professional and services-based industries and incomes heading toward twice the Queensland average.
The suburbs’ average age is 40–59, so families generally come first in this suburb so there is no surprise to see some of Brisbane’s best and most highly sought-after schools scattered throughout the streets.
It has a very leafy, green feel with walking paths and tracks and plenty of green space, and combined with a number of larger character homes that have been restored and renovated it has found a great balance for an inner-city location.
Adding to that the easy access to shops and lifestyle precincts with high walkability will remain in high demand moving forward and has already seen more than 36% growth over the past 5 years.
Other inner-ring suburbs to keep an eye on:
- Auchenflower
- Bardon
- Wilston
With Brisbane tipped to lead the nation for capital growth over the shorter term, it will see interest rise in the Brisbane market.
While there will be opportunities available for almost every budget, it is important to understand the intricacies of each suburb.
Even within these locations, I have mentioned, I would be reluctant to buy in some streets and pockets within these suburbs.
It takes on the ground knowledge and some content to understand the less desirable areas, the flood locations, and the undulating areas.
On the flip side, if you get the location right, you will be rewarded with above-average capital growth and be able to set yourself up for the next stage of the property cycle, while others tread water.
READ MORE: The Top 15 Brisbane Suburbs Primed for Growth
Key tips for buying property in Brisbane
Despite the slowing market, the Brisbane property market is still being infiltrated by interstate investors ‘buying blind’.
Even though Sydney and Melbourne property prices are falling, these comparatively high prices at a time when many investor’s budgets have been downsized, has caused many southerners to follow the sun north and look for property investment opportunities in Queensland but many are making a big mistake.
According to an article in Domain, Sydney investors are increasingly buying properties in Brisbane solely on photographs and skipping inspections.
And they’re buying the wrong properties in the wrong location based on price.
Agents quoted in Domain say these southern investors are buying up in Brisbane suburbs considered “unfavourable” by locals and boosting house prices.
One agent was quoted as saying:
“…blind-buying Sydney investors had flooded into the Logan market.”
“Out of every 10 sales, five will be investors, and two will not have viewed the home, and that is a modest estimate.
“Often it seems as if the investors have no idea about the area’s reputation.”
Domain quoted another agent as saying:
“We are seeing about 70 per cent of Sydney investors buying without seeing the homes.”
Tips: The lesson – don’t buy sight unseen!
It’s incredible what you can achieve, and the unsightly features you can avoid showcasing, when you’re using a good camera and exploiting the right camera angles.
I’ve heard horror stories of people who have bought sight unseen thinking their investment property had an incredible view (it did – but only from the toilet) or who didn’t realise huge power lines dominated the streetscape, because they relied on agent photos only.
The moral of the story is don’t risk purchasing a site unseen unless you have a trusted representative review the property on your behalf.
Let’s consider key tips on how to choose a strong investment property in Brisbane.
1. Buy a property for below its intrinsic value
I’m a big believer in buying property for below its intrinsic value – that’s why I avoid new and off-the-plan properties, which generally attract a premium price tag.
Remember, though, that you’re not looking for a ”cheap” property (there will always be cheap properties around in secondary locations).
You’re looking for the right property at a good price.
Properties to consider may be ones that are a little ugly or untidy but have good “bones” and are in good or superior locations.
Some of Brisbane’s middle-ring suburbs may be worthwhile considering they often have solid homes on land sizes ranging from 405 to 600 square metres.
2. Buy a property that outperforms the averages
Look for an area that has a long, proven history of strong capital growth and is one that is likely to continue to outperform the averages.
This is largely because of the demographics in the area.
These suburbs tend to be those where a large number of owner-occupiers desire to live in the area, because of the lifestyle choices they offer.
I look for suburbs where wages (and therefore disposable income) are increasing above average.
This translates to being an area where locals are able to and prepared to pay a premium price to live there, putting a financial floor under your investment property.
This is also considered to be gentrification.
So what we’re seeing is high-income people moving into particular locations, which perhaps used to be considered blue-collar, and spending their money there in new cafes and on renovating their homes.
In Brisbane, for example, there are a number of inner-city suburbs where this is occurring such as Annerley and Woolloongabba on the south side.
3. Buy a property with a “twist”
An investment must have something unique, special, different, or scarce – some ‘X-factor’ that makes it stand out from its neighbours – in order to land on my shortlist.
So when you’re looking at the Brisbane property market, consider properties that are “special” because of their design, e.g. perhaps Queenslanders or art deco apartments or properties in desirable locations.
Although you must keep in mind that sometimes these unique properties are more expensive to buy and maintain, history shows us they usually have stronger capital growth
Remember that more demand than supply always means higher prices, because of that scarcity factor.
4. Buy a property where you can manufacture capital growth
An ideal investment is one in which you can manufacture capital growth through refurbishment, renovations, or redevelopment.
For example, there are tens of thousands of properties out there that could all have their values increased through simple renovations.
While I don’t believe that investors should subscribe to the “buy, renovate, sell” philosophy, because the opportunity to profit is not great, what works really well, if done correctly, is to buy and hold your investment property after renovation.
Here you buy a property with renovation potential, renovate and then keep it as a long-term investment that has added value.
This added value will give you improved rentability – your property will be more attractive to a wide range of tenants – as well as achieving a higher rent and you will have “manufactured” some equity.
So what does all this mean?
To me, the picture is clear.
Brisbane’s property market is ripe for investment – its economy is improving, the population is growing, infrastructure is being added and property remains affordable.
Your biggest challenge is to find the right property to buy, but that’s what the Brisbane team at Metropole specialise in.
[ad_2]
Source link
