CoreLogic has declared that Brisbane is well placed to take over as the best-performing capital city housing market over the next five years. Working as a Buyers’ Agent servicing the Brisbane market, I have seen that there are clear indicators why the Brisbane Market has recently underperformed for investors but yet is still pipped to be an investing hot spot and has quite a bit of potential.
Brisbane is an excellent place to invest as it is Australia’s third largest capital city but it is still relatively affordable particularly compared to the property prices in Sydney and Melbourne. It won’t take long until families that are priced out of Sydney will consider the move to Brisbane for a more relaxed and affordable lifestyle. This relative price gap when compared to the other capitals is what will increase the demand over the longer term and drive interstate migration.
My Investors are finding they can still afford to purchase properties within 10km of Brisbane CBD, close to Café’s, shops, and schools that would be way out of their price bracket if they purchased in Sydney.
There has been recent media reports focusing on the underperformance of Brisbane but this is due to the oversupply of apartments and inexperienced buyers purchasing the wrong type of property for the demographics of the area. The recent underperformance is only short term, and a reflection of the increased construction that Brisbane has seen of late, in particular apartments close to the CBD. The increased construction has been in line with the future growth plans for Brisbane.
The underperforming properties we’ve seen have been mostly apartments, due to the large increase in supply.
However, these plans for future growth are also what makes Brisbane's suburbs a prime pick for investing for the longer term.
“Population growth from both overseas and interstate is ramping up in Queensland. I have seen the majority of this growth focused in the south-east corner and a lot of our development projects are achieving great results here. Overseas migration into Brisbane is the highest its’ been in the past three years as well as the interstate relocations into Queensland from other states is currently the highest it has been in over 8 years. says Lloyd Edge who has been actively working in the Brisbane market as a Buyers’ Agent.
That being said, although Brisbane is a great place to invest, being successful in the market is not just a matter of pot luck, the inexperienced should be particularly cautious in this property market as it is strongly driven by the unique demographics and climate of the area.
So, what does make an investment grade property in Brisbane?
Ultimately, any investment property must be purchased with the future owner occupier in mind as this is where your capital growth will come from. The lifestyle and demographics of Queenslanders is unique as they have a particular type of lifestyle they enjoy, which is very different to that of Sydney-siders or Melbournians.
Queenslanders love the relaxed outdoor living lifestyle so this needs to be of particular importance in any property and a focus for any investor. Queenslanders prefer properties higher up on stumps to allow air flow and cooling as opposed to the brick low-set on concrete slabs that may be preferred in Sydney.
Air conditioning is not an extra but considered a necessity for rental properties (ceiling fans alone are no longer satisfactory).
Whilst in Sydney and Melbourne, properties that are low lying with a flat walk to the shops may be preferred, in Brisbane it is the elevated vantage points that are well sought after. These properties attract lots of airflow and sunlight. Whilst the low-set properties risk flooding or rising waters so the local owner occupiers avoid these.
As previously mentioned, Brisbane has recently seen a lot of apartment and high rise developments to assist with the future planned population growth in the area. However, the sudden influx of apartment properties has affected the equity and yield of investment apartments in the short term. To avoid this, look for properties that are unique and different, and avoid apartments close to the CBD.
“It is common for inexperienced Sydney-siders to go and invest in any apartment close to Brisbane CBD as compared to their home market, the property appears to be a bargain that is very close to the city. However, they are not finding the growth, yield and equity they would have hoped after holding the property for some time. This is the reason it is important to be equipped with lots of knowledge about the area and seek the advice of a professionals. Recently, I have witnessed the impact from the crackdown on foreign lending as well as the banks tougher lending criteria on the results on Brisbane’s investment properties. Some have made losses on their investments, but if they can afford the costs in the short term, they will see some good results over the long term in the next 5 to 10 years” comments Lloyd Edge, Brisbane Buyer’s Agent.
Lloyd Edge also explains how to find the best investment opportunities- “When I look for investment grade properties in Brisbane, I look to buying in areas with good school catchment zones as these properties will always be in demand. Buying close to reputable private and catholic schools will add value as well as close to bus stops and shopping centres. I always avoid flight paths, highways and main thoroughfare areas.
Before recommending a property for investment, I perform due diligence such as checking the local council websites for future developments, speak to council town planners, and look at recent government planning announcements. There is no cost to being well informed but buying ill-informed can cost you thousands.” Says Lloyd Edge, Brisbane Buyers Agent.
Choosing the right investment property comes down to knowing what you need, knowing what you can afford, and knowing all the market factors in play when you’re ready to buy.
Many buyers feel disadvantaged as the favour is stacked towards vendors. By employing a Buyers’ agent you are able to “level the playing field” by having someone advocating for you. By hiring an experienced buyers’ agent, you are able to mitigate this risk as you will have someone who is independent, experienced, and can perform all the leg-work.
