Much ado about Brisbane
19/01/2016 Monica Jiang, Property & Contracts Coordinator
Sydney may have the harbour and Melbourne’s known for its graffiti laneways, but why is everyone talking about Brisbane at the moment?
From an investor’s point of view, it has so much to offer. Strong economy? Tick. Increase in council approvals? Tick. Growing population? Tick.
As investors are being priced out of the market in Melbourne and Sydney, attention is turning to Brisbane where it is still affordable to invest in property. However, it won’t stay like this forever. Prices are rising and it won’t be long before Brisbane catches up to the other major metropolises. Median house prices have increased to $610,000 and auction clearance rates have also steadily increased.
So the time to strike is now. Conditions are ripe for exploring opportunities in Brisbane thanks to a number of factors.
Queensland’s population is growing – but where are they all going to live?
Previously, the sunshine state’s population growth has been stimulated through overseas migration and natural births. However, with the cost of living in Sydney becoming unaffordable, the recent increase in population can be linked to the number of people moving north from Australia’s major cities. Queensland is experiencing the highest percentage of interstate migration than any other state as people seek a ‘sea change’ and more affordable lifestyles and housing. This in turn creates long term demand for housing and opportunities for investors to capitalise on the current housing shortage.
In recent years, Queensland has been known for its resources boom, but as the saying goes, you can’t put all your eggs in one basket.
The state has a diversified economy and remains the jewel in Australia’s tourism crown. International visitors are ensuring the state’s tourism industry remains buoyant with Tourism Research Australia figures showing that foreign tourists injected a record-breaking $4.6 billion into the Queensland economy in the year to June 2015. International visitors arriving in Queensland were up 7.7 percent on the previous year.
And there’s no sign of it slowing with the lower AUS dollar encouraging overseas holidaymakers.
Starwood’s W Hotel, which is one of the world’s most prestigious hotel chains with hotels in Paris, New York, Beijing, will be building its first Australian hotel in Brisbane in 2018 in preparation for Gold Coast’s Commonwealth Games and the opening of Queen’s Wharf. These tourism related projects act as a catalyst and stimulate the entire state economy – especially within the property and business sectors.
HIA senior economist Shane Garrett said residential building was making a crucial contribution to economic growth at a time when other areas of investment were weak.
According to Master Builders Queensland Executive Director Grant Galvin, the building industry had recorded its best figures since the global financial crisis.
“It’s driven by low interest rates and no change in unemployment,” he said.
“As mining has come off, housing and construction have picked up. We’re buoyed by the residential sector driving the economy at the moment.”
Local councils are coming to the party and giving the greenlight to building developments like never before.
According to the Courier Mail, there has been a 22 per cent increase in the number of residential house approved by councils compared to the previous year, taking it up to 30,000 approvals in 2014. This is good news for investors, as developers are being given the greenlight to start new projects.
Urban Development Institute of Australia Queensland boss Brett Gillan said the approvals boom had been a growing trend for the past 12 months. While Sydney and Melbourne prices continue to soar, the development boom is expected to continue in Brisbane and in doing so, stimulate the local economy.
Investors can feel confident that their properties will deliver a return in Brisbane. CoreLogic data reported last year that Brisbane delivered the highest rental yields of any of the five mainland capitals with houses returning 4.4 per cent and apartments sitting at 5.4 per cent at the end of August.
Investing in Brisbane
The Hopkins Group has long identified Brisbane as an untapped market for property investors. Our portfolio offers a number of recommended properties in the sunshine state and we see the potential in this major metropolis for investors who want to think outside the square.
Click here for a recent webinar on why we’re investing in Brisbane and click here to view our latest recommended properties including projects in Fortitude Valley, Lutwyche and Cannon Hill.
The Queensland housing boom is here for the long term. Now is the time to get in early before this major metropolis becomes another Sydney or Melbourne. You don’t want to miss the boat.
- Building on Housing Boom, Matthew Killoran, Jeremy Perce and Jacinda Tutty, Thursday 3 September 2015, Courier Mail
- Investors drive up Brisbane prices, Michael Bleby, Thursday 3 September 2015, The Australian Financial Review
- Metro Property Development – News, Jimmy Huynh, Thursday 3 September 2015
- Construction boom to flow into 2016, Courier Mail, Tuesday 1 December 2015
Monica Jiang is a Property and Contracts Coordinator with The Hopkins Group (John Hopkins Property Pty Ltd). This blog post contains general advice only, which has been prepared without taking into account the objectives, financial situation or needs of any person. You should, therefore, consider the appropriateness of the information in light of your own objectives, financial situation or needs.
Property Q&A: What to expect between contract sign and settlement
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