Market Report Queensland (July 2009)

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Brisbane growth slowed in the three months to July with resource markets affecting sentiment. But with the sector recovering, and the new SEQ regional plan, investors have a lot to be excited about. Andrew Johnstone reports.

Over the ten year period Brisbane has significantly outperformed the other major Eastern capitals, posting growth of 11.6% per annum for houses, and 10.67% for units. But the July quarter saw growth slow to 2.17%, less than half that of Sydney and Melbourne.

"In general terms 'patchy' is the word I keep using," says Julian Harrison-Tubb, state manager Queensland, WBP Property Group. "There are parts of the market that are coming along nicely, and there are parts of the market that are really suffering."

According to Cameron Kusher, senior research analyst at RP Data, Brisbane has lagged national home price growth, but it is starting to recover now, and investors are coming back into the market.

Brisbane had been harder hit by the downturn in the mining sector because it has a higher exposure to mining related jobs than most cities. However, this is a short term event says Harrison-Tubb.

"That market has turned upwardly so that will have a good positive effect on the Brisbane market," says Harrison-Tubb. "There is not many times when there has been a better time for investors, with strong residential rental demand and low interest rates."

The underlying shortage in number of dwellings has not gone away and Harrison-Tubb maintains a strong view of the Brisbane market.

"There are opportunities everywhere," says Kusher. "In our view the best value is in the second hand market." Building and land costs mean that at current values developers are struggling to compete with the prices of existing stock.

Kusher likes apartments in some of the non-traditional unit markets in areas like Nundah, Annerley and Moorooka.

For houses, Kushers says best opportunities are anywhere you can get within 10 kilometres of the city, on good transport, for example suburbs like Salisbury, Rocklea, Keperra, Zillmere and Banyo. 

There are also significant opportunities in the upper end of the market for cashed up investor in Brisbane, the Sunshine Coast and Gold Coast markets.

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