Brisbane in a holding pattern
While this capital’s performance is consistent compared to its peers, there’s no significant growth on the horizon
Brisbane’s house market saw a reasonable increase of 2.95% over the June 2016 quarter, reports Eliza Owens, market analyst at OnTheHouse.com.au. This quarterly growth was the highest in the country, although the Queensland capital’s unit market was stagnant.
In addition, Real Estate Institute of Queensland (REIQ) figures indicate that the vacancy rates of mid-city and regional suburbs have tightened.
“We are seeing steady levels of supply and equally steady levels of demand for inner-city apartments, and we expect vacancy rates will hover around these levels for some time to come,” says Antonia Mercorella, CEO of REIQ.
This also means that the rental market is currently tight as the number of available properties drops. On the Sunshine Coast, the tightest rental markets are Caloundra and Maroochy, each boasting a 1% vacancy rate.
This positive performance may be attributed to Brisbane’s remarkable affordability compared to its more popular counterparts, which draws southern state residents. However, this does not necessarily signal an upswing.
Low interstate migration
The Sunshine State has traditionally attracted a strong number of permanent residents moving north from the cooler states in the south, but interstate migration figures are slowing.
“When discussing those things that ‘move our market,’ expert property observers in Brisbane know when we thrive, it’s on the back of strong employment and high interstate migration,” explains Herron Todd White’s Month in Review
report for August 2016.
“But while there is a sizeable gap in property values between Brisbane and Sydney/Melbourne, job numbers are down and our property prices have remained relatively uneventful.”
Indeed, the number of interstate migrants has been in the negative over the past two years. As a result, high-rent properties located on the fringe of Brisbane are in limited demand, while the values of mid-city homes remain unmoved.
“As far as we can tell, there’s no great interstate rush to Queensland as yet, and while we continue to be a steady, solid performer compared to other property markets in the nation, not many are predicting runaway price growth in the near future,” Herron Todd White adds.
Infrastructure, events may inspire
A factor that may enhance Brisbane’s economic performance in the future and spell growth is the commencement of major infrastructure projects, which create jobs in addition to attracting new residents.
Southeast Queensland policymakers look set to greenlight construction on the Cross River Rail, and
Toowoomba is developing the second Range Crossing Road, which is expected to help generate growth in this area. Helensvale is also getting a tram service that will link this suburb to the coast, potentially heightening property values.
The interstate rail freight terminal of Bromelton is set to be established at the fringe of Beaudesert in January 2017, opening this area up to NSW via the Sydney–Brisbane rail corridor. Meanwhile, the Beaudesert Bypass project was also approved recently. In the process, over 10,000 employment opportunities could be created, and residential developers have been looking into the Central Western Gold Coast region.
The 2018 Commonwealth Games are regarded as another factor that could cause property values to go up, especially in areas near the Commonwealth Games Village. Herron Todd White believes the resultant demand could be long-term.
Local real estate agents in the Gold Coast also report that low interest rates have been inspiring buyers to look into building their portfolios with properties in this region.
Out-of-state buyers emerge
Out-of-state buyers are among some of the top market drivers in the Southeast Queensland corner.
In this popular growth corridor, purchases of detached dwellings and duplex units have helped suburbs increase in value.
This area is bordered by amenities and boasts convenient access to transport, hence it is attractive to interstate and overseas buyers that are looking into “off the plan and new vacant land allotments or house and land packages”, Herron Todd White reports.
“When we do start to see numbers of residents increase, the rising tide floats all boats,” they add. “Given the relatively small size of the Brisbane property market, everyone gets a boost.”
SUBURB TO WATCH
Southport: Gold Coast giant builds up
Southport houses one of the biggest residential and commercial communities in the Gold Coast and is at the heart of this city. According to Trina Henry, sales specialist at Lucy Cole Prestige Properties, this suburb’s central location is one of its main drawcards for developers and investors.
“There’s the new light rail access, which makes it easy to get to the university and to shopping centres. It’s close to the Broadwater
and parkland precincts. Notably, it’s near the site of the Commonwealth Games, which will be held here in two years,” Henry says.
The Broadwater facing Southport facilitates boating, fishing and watersports activity; kids can also enjoy the water playground in the Gold Coast Aquatic Centre and the surrounding parks. The Australia Fair Shopping Centre contains over 200 stores and a senstadium cinema, and the suburb boasts many local schools, including the popular private TSS (The Southport School). The Gold Coast
University Hospital and Gold Coast Public Hospital are situated here as well, making medical services and employment hubs highly accessible.
From Southport, the Brisbane CBD can be reached via bus and the Nerang train station. Tram services are available as well.