This is Part 2 of a two piece article I have written, you may wish to click back to Part 1 and understand the first 5 things you need to know.
In short, I talked about the need to understand where jobs are being created, looking for good school catchments and why public transport is a must.
I touched on demographics and how the way people are choosing to live is changing and then put a WARNING out there to ensure you understand flooding and stormwater problems.
Today we look at 5 more thing you really need to understand.
As I mentioned last week, I have been investing for 20 years and specialising in Brisbane for the last 15 years.
Now is a time to be trusting decades of experience, not rookies or people with a few years’ experience under their belt, nor people who buy from afar.
It still astounds me that people put (sometimes) millions of dollars in the hands of people that do not have the on the ground perspective and a far greater level of experience.
Hopefully, some of these points will help people realise just how complex and different the Brisbane market is.
6 to 10 Things Brisbane
1. Majority of new infrastructure projects are within 5km of the CBD
A couple of the more exciting infrastructure projects are ramping up in inner Brisbane.
The finishing touches are being put on the Kingsford Smith Drive update that leads from the CBD to the Airport precinct, our fastest growing area.
In the inner city, an exciting subway style system is also in the early stages of development – the Cross-River Rail.
And the Brisbane Metro bus system will link the CBD to suburbs in Brisbane’s south western suburbs.
Understanding the areas and locations that will benefit from these upgrades and improvements will be so important.
Again, there may be the odd new bus or train station here and there in the outer suburbs, but the bulk is occurring within that 5km ring.
2. We may buy in most suburbs, but not in all parts of a suburb
Sure, we buy within 10km of Brisbane but not in all suburbs or areas.
You should be seeking above average, wealth producing levels of return.
To do this you will need to find the best performing suburbs and then narrow down to the best pockets and streets within that suburb.
Just like where you live, there will be areas that perform above average and other areas that perform below average.
I often see the FIFO Buyers Agent fly up and buy in a good suburb and crow about a deal $20,000 or $30,000 less than market value, only to discover it is a property we had already ruled out.
Market depth, knowledge and a level of perspective is critical.
3. Zoning is becoming critically important
There are a lot of changes recently to zoning that has seen a huge number of apartments being built.
The Brisbane City Council is proactive and bullish on further inner-city growth to cater for our rising population.
So again, it is important to understand zoning and likely implications moving forward.
It would not be ideal to buy what seems the perfect property, only to have a block of 50 or 100 apartments pop up as your new neighbour.
Like an most home buyers, we prefer quiet, tree lined streets away from major infrastructure and development.
Having someone at ground level with an understanding of zoning and future changes, will prevent any future issues.
4. The Rich will get richer over the next decade
I must stress, this is not a judge of people.
Over the next decade, in an environment with low wages growth and low inflation, the vast majority of people’s incomes will not grow as fast as they have been.
It will be different for people with multiple streams of income.
They may be investors with additional income from property, shares and dividends or executives that have a bonus and/or business income.
It is your job to find out where this demographic is based and invest your money there.
Not only will there be higher returns, but there will be far less risk as this demographic has the incomes and buffers to ride out the difficult times.
Understanding Weekly Incomes and Wages will be critical.
5. Brisbane is not Melbourne or Sydney – property outside 10km will not catch up
This is perhaps the biggest trap for interstate investors and out of town property “experts”.
You can get away with purchasing further out in a more mature market like Melbourne and Sydney, but not in Brisbane.
Yes, there may be suburbs 20km from Brisbane that have a new train line, a hospital or university under construction, but they lack other critical investment fundamentals.
Primarily they lack large scale jobs growth and as a result, incomes barely keep up with the average.
People are not willing to and are generally unable to pay more for property or pay more to upgrade their property.
“But it will catch up…!” they tell me.
Yes, perhaps in another generation, but not over the next decade, meanwhile prices closer in have jumped even further.
If you are looking to invest in a certain market, it is imperative you understand the intricacies and dimensions that drive it.
Most people are lucky enough to buy 2-3 properties in their lifetime, you only get greater insights from professionals who do that most weekends.
Many people start with a superficial look at a state or suburb and then skip straight to “the property”.
Take the time to dig a little deeper to understand jobs growth, demographic shifts and what types of things are and will continue to be in high demand.
Never assume all markets are equal as even streets and houses within suburbs can differ.
Understand the need to get a greater level of perspective before you shift your focus to the property.
Brisbane itself, along with the economy and property market, will come of age over the next decade and if you can understand the specific locations that will benefit, you can too!
Brett Warren is a director of Metropole Properties in Brisbane and uses his 18 plus years property investment experience and economics education to advise clients how to build their portfolios.
He is a regular commentator for Michael Yardney's Property Update.
Disclaimer: while due care is taken, the viewpoints expressed by contributors do not necessarily reflect the opinions of Your Investment Property.