Brisbane on cloud nine after pricing boost
Experts are gearing up for a good finish to the year for Brisbane, after the first quarter of 2016 has shown that Brisbane isn’t slowing down in line with its southern cousins
Historical trends show that the Brisbane market experiences an upward sweep following booms in Sydney and Melbourne, and data to date has revealed that is just the case right now.
CoreLogic RP Data’s Housing Market and Economic Update report shows that Brisbane dwelling prices have gained 5.5% growth, jumping 1.8% in February 2016 alone – a significant increase in comparison to Sydney’s 0.5%.
Population growth, low interest rates and comparable affordability are boosting Brisbane’s attractiveness to investors – particularly Sydney investors who are now priced out of their own market.
“For a property investor, Brisbane is definitely one of the better markets around the country at the moment,” says Phil Game, principal and buyer’s agent at Astute Realty.
While he says units in the city – which are at risk of oversaturation, with more development to come – could still be a good option for investors with a long-term outlook, he instead directs his buyers to outer suburbs such as Nundah and Chermside, both of which are returning average yields of 5%, with medians of around $415,000.
Qld up, regional centres down
Looking outside of Brisbane, Game says that due to the volatility of industries that support regional townships, staying focused on Southeast Queensland is a safer option.
“The biggest risk is that when you go to the smaller towns and regional centres, they don’t have the employment diversity to reduce investment risk,” says Game. “By this I mean that a single industry in these locations can suffer, and real estate as a whole will suffer.”
Queensland’s mining industry has been one of the hardest hit in Australia, with the Queensland Resources Council stating that figures showed a total cut of over 2,000 jobs in Central Queensland between 2013 and 2015. BHP Billiton Mitsubishi Alliance and Hastings Deering mines in Blackwater both announced job cuts at the end of 2015, while once-thriving rural sectors such as Mackay are seeing the effects of the economic downturn with rapidly sliding real estate values. CoreLogic RP Data figures show house values are down 24% in the year to February, holding times on the market are lengthy at 157 days, and vendor discounts are high, at 24%.
Closer to the Brisbane epicentre, the region of Ipswich continues to thrive, bolstered by its own growing economy and proximity to the capital city. New surrounding developments, including master-planned community Providence in Ripley Valley, are drawing young families looking for appealing neighbourhoods close to city centres.
Down the southern corridor of Southeast Queensland, the Gold Coast keeps up its positive price growth and rising population, factors underpinned by its lifestyle and world-famous beaches.
While the recent escalation of development on the Gold Coast can be partially attributed to the impending Commonwealth Games, developers also seem to have more confidence in the market.
“Some substantial developments that have been on hold for years are now going ahead. The Coomera Town Centre is one of those,” says Game.
Beachside suburbs like Mermaid Beach, Burleigh Heads and Miami continue to grow in value, with buyers often opting to subdivide to take advantage of large blocks.
The spotlight is also being focused on the Gold Coast’s cheaper northern suburbs, such as Logan, Coomera and Ormeau, which are considered to be midway points between the two metro cities. These suburbs are undergoing enormous development, with the expectation that demand will ultimately grow as buyers are priced out of the Brisbane and Gold Coast markets in years to come.
In the Herron Todd White market report for February, analysts have identified Brisbane, the Gold Coast, the Sunshine Coast and Cairns as rising markets, while regional centres Bundaberg,Emerald, Mackay, Gladstone and Rockhampton are all approaching the bottom of the market.
“I don’t expect the market to go up massively, but I do expect it to be pretty solid,” says Game of the future of Brisbane properties. “I’d like to see about 6% growth each year for the next three to four years. That would be a great result.”
Date: June 2016
Author: Your investment PROPERTY