There’s no boom on the horizon for Brisbane, but the Sunshine State presents a balanced market
Brisbane is powering through the national downturn with its low prices, which are helping to shield it from the impact of increasingly restrictive lending criteria.
“More affordable house prices mean that the Queensland property market is generally less exposed to growing uncertainty around tightening lending criteria and any further changes that may come into play as a result of the royal commission,” says Patrick Leo, director of James Nihill.
“The real opportunity emerges as housing in some key areas remains undersupplied and will further tighten as the population continues to grow as forecast.”
In addition to affordability, Nihill notes that the market is mainly supported by high levels of interstate migration, steady population growth and infrastructure projects. Regions to watch include Logan and Ipswich, which are facing undersupply due to the predicted population growth.
“Ipswich is set to attract a strong share of population growth, registering a 144% increase in new residents between 2016 and 2036. Similarly, Logan’s population is set to grow by 56%, while the Brisbane CBD is also forecast to receive a 21% boost to its residential population by 2036,” Nihill says.
Brisbane could be in a shaky position
While it is not experiencing a noticeable price drop like Sydney and Melbourne, Brisbane may not be in the best position either.
“We are holding on for dear life to a positive growth figure – a rate of 1.1% means Brisbane is really performing the best out of the three largest capital city property markets. However, it’s important to recognise investors are jittery and the market is slowing, and it’s easy to see why,” says Real Estate Institute of Queensland CEO Antonia Mercorella.
The federal election was certainly a factor, with political movements negatively affecting investors’ view of property investment.
“Negative gearing is the sacrificial lamb; combine this with a state government review of the tenancy legislation and the likelihood that landlords will lose some rights, and investors are understandably questioning the value of property as a wealth-building tool. Our property market is currently in the shadow of some large, gathering storm clouds,” Mercorella says.
Nonetheless, she is confident that the Sunshine State has the ability to weather the storm.
“Restoring consumer confidence and giving buyers access to finance would benefit the market – and the broader Queensland economy – significantly.”
SUBURB TO WATCH
LABRADOR: Values slip in tourist destination
With a name that evokes visions of cute puppy dogs, the suburb of Labrador is more than a great moniker – it is a Gold Coast destination known to holidaymakers for its wonderful views of South Stradbroke Island, and its historic charm.
For those looking to stay here more permanently, the suburb saw property prices decrease slightly in the year to March 2019. The blow was lighter for house values, which dropped by 4.1%, while units fell by 6.4%. In the rental market, however, the average house rent increased by 1.7% to $438 per week, while for units it was steady at $385 per week. Both property types are seeing high average yields of 5% plus.
Tourism: Labrador is popular with tourists for its natural attractions and history
Rent: The average weekly rent for houses increased to $438 – for units it was unchanged
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