Construction outstrips population growth in Brisbane
While investors in the southern states are showing strong interest in Brisbane, the apartment market in this region is expanding at a far faster rate than buyer demand. Thus, while Brisbane has gained momentum over the past year, it is still regarded as an underperforming property market.
“Brisbane is suffering from an oversupply of new apartments, mostly in the CBD, city fringe and inner suburbs,” says Michael Yardney, CEO of Metropole Property Strategists. “Even though forecast completions will decrease over the next few years, the current oversupply will limit capital growth and rental growth for a number of years.”
By contrast, the house market should be trending along at the same rate as in 2016, with houses in the metro offering the highest yields and displaying the most growth potential. This has been triggered by the slight upswing in employment, bringing a similar increase in population. Housing stock hasn’t risen at the same rate as unit stock, so demand and supply are meeting well.
Affordability keeps Queensland on the map
Low prices continue to be Brisbane’s ticket to fame. However, although the market is expected to tick upwards, it certainly won’t be growing at the same rate as the more popular capitals, as the volume of job growth isn’t there to sustain the property market.
Outside the metro, however, light is being shed on areas such as Southeast Queensland due to heavy marketing.
“Southeast Queensland is continually being promoted as a great area to invest, and as such has been enjoying strong market activity of late,” says Charles Tarbey, chairman and owner of Century 21 Australasia.
“The area has attracted attention not only due to price points but because of the great lifestyle offered, the favourable reputation of the area for local and international visitors, as well as its location and relative proximity to Brisbane.”
Southeast Queensland’s current upswing is indicative of how important tourist value can be to a struggling resource-focused state.
“The towns that focus on tourism will benefit from rising tourism expenditure and the investment that’s needed to accommodate that as well,” explains Angie Zigomanis, senior manager of residential property at BIS Oxford Economics.
“As more jobs are created from that sort of work, more people arrive, which means they need more construction and housing. In a lot of areas that do have a big focus on tourism, we do expect to see some upside, such as Gold Coast and Sunshine Coast.”
City dwellers are ready to go small In the city, houses on smaller lots are becoming quite popular with buyers for lifestyle reasons.
“It’s a great alternative for people who still want to be able to have a pet, have control of their property, have very little maintenance, and be without any body corporate fees,” says
Mark Bellingham, agent for Purple Bricks Queensland.
First home buyers are also prepared to compromise on lot size if it means affordability, especially if it comes with convenience and accessibility.
“People are always going to have some sort of block of land, but they’re also reticent to go further out. They want to stay closer to work,” explains
Scott Hay, agent for Place Estate Agents in Coorparoo.
“If I had more properties on small lots, I would sell them really quickly. I’d say that normally developers are buying blocks and putting apartments up, but with the current state of that market, that could change and we could see more of these small-lot homes go up.”
However, while inner-city buyers seem ready to buy smaller properties, those looking a little further out may not be prepared to compromise on size, having a strong desire to own a traditional block in the suburbs.
SUBURB TO WATCH
Burpengary: Rapid growth defines Moreton Bay suburb
Situated within the Moreton Bay region, Burpengary is regarded as one of the area’s fastest-growing residential suburbs, with many amenities popping up in recent years, including major supermarkets like ALDI.
There are also three primary schools and two high schools in town. For recreation, the Caboolture Regional Aquatic Centre is the place to be, as it has many sports and picnic facilities.
Burpengary is just 10km from the new satellite city of North Lakes, and it is served by a local railway station, making travel easy for commuters.
It is therefore no surprise that the house market in this suburb has grown consistently, with the average rental return coming in at nearly 5%. And while the unit market has stumbled slightly in the past 12 months, returns are very strong at 7%.