Brisbane Buyers look to the inner city
Regarded by Herron Todd White as one of the most forgiving capital city markets, Brisbane is a city that many buyers are looking to for their next investment.
“There are very few disappointed long-term buyers in our Sunshine state’s big city, provided they’ve stuck with the fundamentals and bought the right property in the right position at the right price,” Herron Todd White states in its February 2017 Month in Review report.
“With this historic performance as a foundation, there are opportunities to get into the Brisbane market and hold tight that will leave you feeling very satisfied with your decision, come a market cycle or two.”
Several popular café suburbs are commanding high prices at present, including Paddington, Bulimba and Woolloongabba. Modest detached housing rarely comes with a price tag lower than $700,000.
However, it is important that buyers, especially investors, continue to take quality into account, to ensure the property attracts good tenants. The median weekly rent in the city has been consistent at $450 – and demand has kept this rate afloat to date, but inner city apartments are starting to feel the impact of oversupply concerns.
Nonetheless, Brisbane must still surmount the issue of low interstate migration levels as a result of limited job opportunities. Thus far, the state’s economic situation is not set to attract new residents, and this could lead to oversupply as new stock continues to enter the market.
Infrastructure drives regional suburbs
Affordability continues to define Brisbane’s property market, and the benefits of the low prices have trickled through to the middle-ring suburbs, with growth predicted in Kedron and Wavell Heights. These areas outside the metro are expected to become more popular with those people who have been priced out of Brisbane city.
The property market in the fringe suburbs has also been remarkably active, with investors looking into house-and-land packages.
Meanwhile, the establishment of facilities and infrastructure in the western corridor approaching Ipswich has brought new life to the region.
Areas beyond the metro are also experiencing a resurgence, with Toowoomba being primed for major development. Current projects include the Toowoomba Second Range Crossing and the extension of the Grand Central Shopping Centre. The northern end of the Gold Coast is presently being regarded as a growth corridor, with new estates coming in. It has been supported by recent developments, including the upgrade of Exit 54 and the near-completion of the new Westfield shopping precinct, Coomera Town Centre.
The western section of the Gold Coast is also being spruced up for the Commonwealth Games, with road upgrades and the establishment of commercial facilities. In the southern part of the region, there is a proposal to improve accessibility through an extension of the light rail to the airport.
Rural suburbs inconsistent
In addition to being among the most affordable pockets of Queensland, rural areas are presently providing buyers with an option for a relaxed lifestyle as well as jobs in different industries.
According to Darryl Conroy, senior economist at Suncorp, one of these regions is Rockhampton, which is strongly supported economically by the cattle sector.
“I think we’ve had a number of years of fantastic sales,” Conroy comments.
However, while sales have been on the up, rentals in Rockhampton went down in 2016.
By contrast, rents in Townsville increased over the December 2016 quarter. The region also recorded slight growth late in 2016 following a tumultuous two years. “We’re starting to see stabilisation,” Conroy notes.
Meanwhile, property prices in the Mackay were freefalling in 2016 with the mining downturn, but began to recover near the end of the year. Thus, agents are now feeling more positive.
“The vacancy rate for rentals almost halved, which was a sign of people coming to town,” says Ben Chick, principal at Explore Property Mackay.
SUBURB TO WATCH
Pimpama: Units boosted in the transformation of a rural suburb
The northern Gold Coast suburb of Pimpama has seen growth come with its urbanisation. The unit market, in particular, has become popular in recent years. The high rental yield of 5.4% for apartments appeals to investors, in this central area that is considered to be the midway point between Brisbane and Surfers Paradise.
Following a slump in recent years, houses are beginning to recover and increase in value again, with the median price clocking in at $423,125. In terms of population growth, the Australian Bureau of Statistics reported that in the 2014–15 period, Pimpama was the fastest-growing region in Queensland.
It helps that various convenient amenities have been established here, including several schools and sports facilities. A number of plans are also in place to improve the local shopping district. The suburb is serviced by rail through Ormeau station.