The Case for Buying Property in Brisbane in 2019 and 2020
The Brisbane property market has underperformed other capital city markets in recent years. Dragged down by the floods in 2011, a mining slowdown and an oversupply of apartments, it has struggled to gain traction. However in 2019 and 2020, with interstate migration picking up, a large number of big budget infrastructure projects commencing and (as always!) a fabulous and affordable lifestyle, it may soon be Brisbane’s time to shine.
According to the Australian Bureau of Statistics (ABS), strong population growth is forecast for Brisbane, with the city expected to grow from the current 2.4 million residents to over 3 million by 2027. Additionally it is well located as the closest major city to the growing tourist and consumer markets of Asia and the South Pacific.
There are 5 main reasons why I believe Brisbane is a great place to purchase property in 2019:
1) Infrastructure Projects and Economy - The Brisbane economy is expected to strengthen significantly over the next 5-10 years as more jobs are created and a number of major infrastructure projects are completed. These projects include transport infrastructure, entertainment precincts and education facilities such as the Queen’s Wharf Casino and Hotel Development, Brisbane Airport’s Second Runway, a new International Cruise Terminal, Cross-River Rail, Brisbane Live Entertainment Centre and a new University (USC) at Petrie.
2) Weather and Lifestyle – The climate in Queensland is second to none – “beautiful one day, perfect the next”. This stands out as a major point of attraction for those looking to relocate interstate and live a more outdoors lifestyle. You can go to the beach year-round and avoid those nasty cold winters! Additionally there is a strong schedule of cultural events and festivals throughout the year including a plethora of food and wine festivals, major athletic events as well as Riverfire and The Ekka.
3) Affordability – As of March 2019, the median house price in Brisbane is ~$540,000, compared with ~$890,000 in Sydney and ~$730,000 in Melbourne (CoreLogic). Additionally, the house price to income ratio is 6.0 for Brisbane, 9.1 for Sydney and 8.1 for Melbourne. You get a lot more “bang for your buck” in Brisbane and this can take the pressure off the household budget with ever increasing living costs. Can you imagine buying a house in good condition for <$550k on a 600m2 block and within 10km of the CBD in Sydney or Melbourne? We do this all the time for our clients in Brisbane!
4) Yield – It is not uncommon to get yields of over 5% in Brisbane, with the median house yield sitting just under 4.5%. Whereas in Sydney and Melbourne you are lucky to get over 3%. As an investor this strengthens the bottom line and creates strong cash flow opportunities. If you already own property with lower yields, this is a great way to balance out your portfolio and get the best of both worlds.
5) Capital Growth Potential - QBE’s Australia Housing Outlook Report that was released last year picked Brisbane as a top performer for 2018 – 2021, particularly compared to the Southern Capitals of Sydney and Melbourne where prices are expected to continue to fall over this timeframe. There is a limited supply of good quality housing in Brisbane for which demand will continue to rise.
As mentioned in my previous article, Should You Invest for Positive Cashflow or Capital Growth?, in my opinion the best way to build wealth through property is to target properties that are likely to have the strongest capital growth. Remember, not all parts of Brisbane are the same! My recommendation is to stick to established houses on good blocks of land in the best locations, with strong transport links to the CBD and with easy access to local amenities. Sometimes it is possible to purchase a house that has renovation or development potential, adding to your options down the track. Your budget will determine the best place to buy, and if you have a larger borrowing capacity ($1m+) you may wish to diversify and purchase 2-3 properties.
The apartment market will bottom out eventually and the oversupply will start to get mopped up by the new residents moving into the city. This will present some opportunities to pick up well-located apartments at bargain prices, however at this stage of the cycle I still believe established houses represent a better investment.
At Allen Real Estate Buyer’s Agency, we are out on the ground searching for properties and “pounding the pavement” on a day to day basis, constantly scouting the suburbs of Brisbane for good opportunities to purchase established houses for our clients. We avoid brand new houses and development projects due to the large premiums charged, potential oversupply and a lack of value for money.
If you are thinking about purchasing your next home or investment property in Brisbane and want to find out more, feel free to give me a call or send me an email. I’ll be happy to answer any questions and send through some more information on the purchasing process and where we are seeing good buying opportunities. Alternatively fill out an enquiry form on our website by clicking Here.
Micah Keall-Grant
Buyer’s Agent – Allen Real Estate
micah@allenrealestate.com.au
0466 588 482
www.allenrealestate.com.au
According to the Australian Bureau of Statistics (ABS), strong population growth is forecast for Brisbane, with the city expected to grow from the current 2.4 million residents to over 3 million by 2027. Additionally it is well located as the closest major city to the growing tourist and consumer markets of Asia and the South Pacific.
There are 5 main reasons why I believe Brisbane is a great place to purchase property in 2019:
1) Infrastructure Projects and Economy - The Brisbane economy is expected to strengthen significantly over the next 5-10 years as more jobs are created and a number of major infrastructure projects are completed. These projects include transport infrastructure, entertainment precincts and education facilities such as the Queen’s Wharf Casino and Hotel Development, Brisbane Airport’s Second Runway, a new International Cruise Terminal, Cross-River Rail, Brisbane Live Entertainment Centre and a new University (USC) at Petrie.
2) Weather and Lifestyle – The climate in Queensland is second to none – “beautiful one day, perfect the next”. This stands out as a major point of attraction for those looking to relocate interstate and live a more outdoors lifestyle. You can go to the beach year-round and avoid those nasty cold winters! Additionally there is a strong schedule of cultural events and festivals throughout the year including a plethora of food and wine festivals, major athletic events as well as Riverfire and The Ekka.
3) Affordability – As of March 2019, the median house price in Brisbane is ~$540,000, compared with ~$890,000 in Sydney and ~$730,000 in Melbourne (CoreLogic). Additionally, the house price to income ratio is 6.0 for Brisbane, 9.1 for Sydney and 8.1 for Melbourne. You get a lot more “bang for your buck” in Brisbane and this can take the pressure off the household budget with ever increasing living costs. Can you imagine buying a house in good condition for <$550k on a 600m2 block and within 10km of the CBD in Sydney or Melbourne? We do this all the time for our clients in Brisbane!
4) Yield – It is not uncommon to get yields of over 5% in Brisbane, with the median house yield sitting just under 4.5%. Whereas in Sydney and Melbourne you are lucky to get over 3%. As an investor this strengthens the bottom line and creates strong cash flow opportunities. If you already own property with lower yields, this is a great way to balance out your portfolio and get the best of both worlds.
5) Capital Growth Potential - QBE’s Australia Housing Outlook Report that was released last year picked Brisbane as a top performer for 2018 – 2021, particularly compared to the Southern Capitals of Sydney and Melbourne where prices are expected to continue to fall over this timeframe. There is a limited supply of good quality housing in Brisbane for which demand will continue to rise.
As mentioned in my previous article, Should You Invest for Positive Cashflow or Capital Growth?, in my opinion the best way to build wealth through property is to target properties that are likely to have the strongest capital growth. Remember, not all parts of Brisbane are the same! My recommendation is to stick to established houses on good blocks of land in the best locations, with strong transport links to the CBD and with easy access to local amenities. Sometimes it is possible to purchase a house that has renovation or development potential, adding to your options down the track. Your budget will determine the best place to buy, and if you have a larger borrowing capacity ($1m+) you may wish to diversify and purchase 2-3 properties.
The apartment market will bottom out eventually and the oversupply will start to get mopped up by the new residents moving into the city. This will present some opportunities to pick up well-located apartments at bargain prices, however at this stage of the cycle I still believe established houses represent a better investment.
At Allen Real Estate Buyer’s Agency, we are out on the ground searching for properties and “pounding the pavement” on a day to day basis, constantly scouting the suburbs of Brisbane for good opportunities to purchase established houses for our clients. We avoid brand new houses and development projects due to the large premiums charged, potential oversupply and a lack of value for money.
If you are thinking about purchasing your next home or investment property in Brisbane and want to find out more, feel free to give me a call or send me an email. I’ll be happy to answer any questions and send through some more information on the purchasing process and where we are seeing good buying opportunities. Alternatively fill out an enquiry form on our website by clicking Here.
Micah Keall-Grant
Buyer’s Agent – Allen Real Estate
micah@allenrealestate.com.au
0466 588 482
www.allenrealestate.com.au
If you want to get in touch, please send me an email:
micahkg@gmail.com
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