The month in review: Brisbane
By Herron Todd White
October, 2009
We often consider the south east Queensland market over
the past few years as the beacon of sterling performance
for the nation as a whole, but like many other locales
around the country, Brisbane et. al. has had its share of
poor performers over the past annum. We have not been
as vulnerable to wild fluctuations in value as some of our
regional and bigger city cousins, but there are a couple
of areas where buyers are now thinking it may have been
best to keep the powder dry rather than run in all guns
blazing.
The Redcliffe peninsula was a stellar performer through
the 2003 boom. The pointy end of Brisbane’s northern
beaches appeared to be an undiscovered wealth of
natural riches that went from obscurity to belle of the
ball. Council was gung-ho in getting plenty of capital
invested in the area and, on the whole, it has awoken this
sleepy centre. The downside is the current and continuing
oversupply of new units in the area, particularly in the high
rise sector. Local government took on a flexible approach
to development submissions where many projects
were assessed on an individual basis with such items
as public space contributions affecting the allowable
density of a site. Much of these large scale attached
unit developments also take advantage of water views
and a café lifestyle that drives demand in so many other
centres. The area saw a rush of investors from all around
the country eager to take advantage of this now revealed
gem. Unfortunately, oversupply is knocking the wind out
of the areas sails (and its sales). Capital growth for new
unit buyers has been a touch subdued and it looks to
continue in this disappointing vein for a little while yet.
A surprise disappointment has been the multiple
tenancy properties in greater Brissy. Multi room student
complexes, genuine purpose-built flats buildings and
boarding houses haven’t sparked as expected over the
past year. The income sure looks good but its fair to say
that some steam has escaped the rental market and future
income potential is a touch more tarnished than it was 12
months ago. These properties probably have some good
potential in the long term as long as you stick with the
fundamentals - good location and a ready tenant base.
Infrastructure upgrades are another area that has
lowered buyer expectations in locations that deserve a
little more respect. Kedron is a good case in point. Almost
overnight the Northern Busway turned sections of the
suburb into a dust laden construction site – not the thing
you necessarily want to wake to each day. The works have caused quite a bit of inconvenience and put off a
few purchasers. The upside for those willing to take the
plunge and grin and bear it is that, if finished right, these
areas will benefit from improved transport access and
useable community infrastructure.
Finally, the prestige sector was one that could not take a
trick in 2009. The greatest disappointment was probably
for those buyers who set record prices for new units in
our river city while things were rosy over early 2008.
Unfortunately this sector copped the brunt of the bad
news, and it wasn’t just isolated to units. The plus is that
if you have the dough and the steel, it is possible to pick
up nice little prestige property on today’s market that will
no doubt prove a shrewd purchase in the coming years.
Once again go for the golden fundamentals and you
might find you’re on a winner.
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