It appears Brisbane is becoming popular with more than just investors
, with signs an increasing number of first home buyers are looking to the Queensland capital in their attempts to break into the property market.
According to professionals in the Brisbane real estate industry, the current low interest rate environment and a desire to get in before prices skyrocket are encouraging renters to become buyers.
Jasmina Petrovic, joint principal and director of Brisbane real estate agency North South Real Estate, said enquiries from tenants looking to buy have become a common occurrence, and the Reserve Bank’s decision this week to keep the cash rate on hold will make the Brisbane market even more attractive to home buyers.
“This is especially true for the rental market, with many of our agents consistently being contacted by long-term renters who are keen to enter the property market,” Petrovic said.
“With [Tuesday’s] announcement that interest rates will remain on hold until November, agents can expect to see an increase in the number of groups through open homes,” she said.
As low interest rates encourage people to buy, Petrovic said prices in Brisbane are moving up. In turn, Meighan Hetherington, director of Property Pursuit Buyer’s Agency, believes that growth is also tempting renters to make the switch.
“We’re definitely seeing people who typically were long-term renters really start to look at buying,” Hetherington said.
“I think a lot of them are looking at the market now and thinking this is their chance to get in before the prices really start to rise,” she said.
Hetherington said the changing attitude of many renters in the city has caused demand for rental properties to fall, but she said that doesn’t mean Brisbane isn’t a viable investment opportunity.
“As tenants look to buy, we are seeing less competition for rentals and we’re definitely down from when competition for rental properties peaked in 2013. As a result yields are starting to suffer,” she said.
“That hasn’t put off investors though. They seem to be very happy to buy for the capital growth and ride through the softening yields and wait for that to turn around again.”
While there are good capital growth opportunities to be had, Hetherington warned investors - especially those from interstate - that not all of Brisbane offers the same favourable conditions.
“A lot of what are the popular areas, particularly with investors from interstate, aren’t the ones that have the best growth potential.
“Of the 159 suburbs in Brisbane, we’ve identified 58 that have investment potential and then across that there are only certain properties that will do well.”
As the city sees a boom in new apartments coming online, investors looking at Brisbane should consider the city as more than one market, she said.
“You really need to split it into separate markets, detached houses and townhouses are doing well and still have a strong upswing to go through, however it’s definitely not the same for units,” Hetherington said.
“I think what we’ll see with the large number of units popping up at the moment is that they’ll sell off the plan for quite reasonable prices, however when it comes that people want to resell in five years or so they’re going to see a fair bit of capital loss.”
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