The outlook for the Sunshine State’s housing market is positive as a strengthening economy boosts population growth
Good things are on the horizon for Brisbane as 2018 rolls in.
“There are great investment prospects for buying well-located houses in Brisbane’s inner- and middle-ring suburbs where capital growth is likely to be higher this year,” says Michael Yardney, CEO of Metropole Property Strategists.
Queensland’s strengthening economy is a big contributing factor – about 100,000 jobs were created in 2017. The population has swelled, and this has led to burgeoning interest from owner-occupiers and investors.
However, new and off-the-plan apartments continue to flood the CBD and Brisbane’s inner ring, with another 15,000 units estimated to reach completion in 2018. The lack of demand to meet supply limits capital and rental growth potential in the unit market.
Nonetheless, the number of interstate investors coming into Brisbane is expected to continue to rise.
"While still nothing to write home about, we are encouraged by the mild improvement in Queensland’s economy,” says Simon Pressley, managing director of Propertyology.
“However, interstaters would be wise to note that more than 50% of Queensland’s population reside outside of the state’s capital city."
Tax hikes could halt progress
A proposal to increase property taxes could put the brakes on this growth, however.
A suggestion has been made to elevate land and foreign investor tax rates, and it is a factor that may have contributed to deflating consumer confidence, according to the ANZ/Property Council Survey released in January 2018. As a result, Queensland now records the lowest confidence levels in the country.
“At a time when we need to do more to catch up with other markets, increasing taxes on property is a big economic risk,” says Chris Mountford, executive director of the Property Council of Queensland.
“Taxes on business and investment are ultimately taxes that will be borne by Queenslanders. They are simply another cost for Queensland businesses to contend with in a period of considerable cost pressure."
Predictions for forward work schedules, staffing-level expectations, and Queensland’s economic growth appear bleak, highlighting the effect of the proposal on consumers, particularly on potential commercial investors. Thus, it could slow job creation.
SUBURB TO WATCH
EDMONTON: Cairns suburb tries to hold
In the suburb of Edmonton, houses and unit prices dipped slightly, with median prices sitting at $324,688 and $153,448, respectively. Renters occupy 36% of the market, and according to locals, demand from tenants is always high.
The sugarcane industry was previously the main driver of employment in the region, but the population growth that Edmonton has experienced has opened up a larger variety of industries, and the suburb’s proximity to Cairns City means a reasonable commute for workers and professionals.
Edmonton also has a number of good schools, sporting facilities and doctors’ surgeries, with plans for a second public hospital to be built in the next decade.
Affordability: House prices are under $350,000, and unit values around $150,000
Amenities: Edmonton is home to several schools, and there are plans to build a hospital