As buying activity returns to normal and capital growth remains slow and steady, a rollout of major infrastructure projects hints at prosperous times ahead.
Residential property prices continue to stabilise in the Queensland capital, with a blitz of major infrastructure projects just around the corner.
Brisbane experienced positive capital growth for both houses and units over the June quarter, but values are yet to take off, with median prices of $467,500 and $372,000 for houses and units, respectively. The market ranks low on the capital city median property price board – with only Adelaide
and Hobart behind. Good news for buyers, not so rosy for sellers.
Year-on-year growth for houses is far lower than the long-term annual average, with Residex recording a 3.39% rise over the 12 months to June, compared to annual average growth of 11.47% over the past 10 years.
According to Meighan Hetherington, director and principal of Brisbane-based buyer’s agent Property Pursuit, although buyer enquiries have dropped off slightly in recent times, the investor market is still going strong.
Well-positioned properties are being snapped up quickly – particularly those in the $750,000- plus range. “More than 70% of our current investors are spending more than $700,000 on each investment property,” Hetherington says. “They’re focusing on quality locations close to the CBD and transport, and also quality character-style houses.”
A major rollout of infrastructure projects across the South East Queensland region shows promise for further capital growth in the state’s property markets. Property Council of Australia’s Queensland executive director, Steve Greenwood, says that governments at all levels are making investment commitments for additional infrastructure in the state. This, he says, will deliver serious benefits to investors. “History has shown us that investment in infrastructure delivers real increases in property values and local economic development opportunities,” explains Greenwood. “This increase in value is obviously most significant in those areas within the immediate vicinity or catchment of the new infrastructure, but there are broad regional benefits as well.”
However, Greenwood adds that in the “current sluggish investment climate”, investors may have to bide their time before infrastructure projects are reflected in property values.
Ayda Shabanzadeh, managing director of Brisbane property investment consultants Grow Consulting Group, says there are a number of major infrastructure projects currently underway in the city, including road, rail and pedestrian-friendly developments.
The $2.12bn Gateway Upgrade Project is one of the state’s biggest ever bridge and road projects, and will comprise the new Gateway Bridge plus dedicated pedestrian and cyclist paths. Four lanes of the bridge were opened to traffic in May, with the remaining lanes to be completed by the end of the year – six months ahead of schedule.
“When all the final approach roadworks are completed in November this year, the renamed Sir Leo Hielscher Bridge will be fully opened to traffic, with 1.6km of 12-lane motorway – six lanes in each direction – over the Brisbane River between Murarrie and Eagle Farm,” says Queensland premier Anna Bligh. “The Sir Leo will slash travel times between Brisbane’s east and the inner north because it has the capacity to carry 200,000 vehicles across the Brisbane River.”
Shabanzadeh says public transport in the city is also set to benefit. “Upgrades to rail infrastructure have certainly been a focal point for the federal government, which is contributing $20m for a feasibility study into two new rail tunnel corridors in Brisbane’s CBD to be delivered between 2016 and 2026.” “The new City Glider service, which offers free buses between New Farm
and the CBD every 10 minutes, will also go a long way in providing residents greater access to the city, and increase demand and therefore property values here too.”
CityCycle bike hire stations are expected to be implemented close to bus, train and ferry connection sites by late 2010, which will enable commuters better access to the city.
“A lot of infrastructure activity improving traffic flow to the airport is currently underway, including the Airport Link, an underground tunnel connecting Brisbane’s northern suburbs, the Inner City Bypass and the Clem 7 tunnel to the airport precinct,” Shabanzadeh adds.
A number of major boons to commuters have opened in the Brisbane CBD in recent months, including the $370m Go Between Bridge (formerly Hale Street Link), which opened on Monday, 5 July. The four-lane toll bridge connects South Brisbane
and West End with Milton, Coronation Drive and the CBD.
The Clem Jones Tunnel (Clem 7) also opened in March, saving drivers travelling across the city up to 20 minutes by providing a bypass under the CBD.
Shabanzadeh explains that all of these transport links will boost property values in Brisbane’s surrounding suburbs. The property investment consultant says she’s witnessed an emerging trend of homebuyers and investors focusing on proximity to transport nodes. “Where once homeowners and investors valued waterfront views above all else, they are now putting a great deal more emphasis on whether their home’s location allows easy access to their place of employment and other amenities,” she says.
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