The month in review: Brisbane
By Herron Todd White
So here we sit at the end of another year. A moment for hindsight to rear its ugly head so we can assess in stark reality just how successful our predictions were at the beginning of 2015.
We took what some might call a ‘soft’ approach to the predictions by saying 2015 would continue along the lines of 2014 – a firming market that would see long-term average capital gains. Well we were pretty much spot on. It wasn’t a crazy market, but ask anyone looking to buy and they’ll tell you that property priced to sell was receiving strong demand and would be under contract within a few weeks at most. If vendors stepped over the mark with pricing however, they were in for a long wait.
Markets continued to perform at different speeds. As we’ve come to know and love about Brisbane, the inner city suburbs always see plenty of demand. As you move further out, demand slowly softens. There was a growth wave this year. After some very strong gains within the five kilometer ring, demand started moving outward. At last count, the wave was at the 10 kilometre ring. To our credit, we predicted this back in February and it’s certainly come to pass, particularly in the entry-level stock.
Our strongest caution for those looking to invest in 2015 was to watch out for new unit stock, which was traversing into oversupply territory – specifically poorly designed investor grade product. Once again, a spot-on warning. Of course, construction continues on these high-rise projects, particularly close to town. Worries are beginning to creep in that some stock may have a hard time valuing upon completion. We’ll have to wait and see.
As for our misses, they weren’t too dramatic. We did predict a rise in infrastructure might help capital gains in outer suburbs, citing the rail link to Redcliffe as a possible driver, but mostly these areas continued to be flat performers this year.
We also thought inner city property would continue to perform at stellar levels of growth, and it did in the first half of 2015, but in all honesty it softened a little more than we expected in the second half on the year.
Our wrap of the year’s activities are therefore:
• The inner suburbs were still the strongest. Examples include Coorparoo, Camp Hill, East Brisbane and Norman Park in the $600,000 to $1 million range for dwellings. West End/Highgate Hill was also strong for dwellings $900,000 to $1.5 million. There was also renewed interest in Hawthorne, Bulimba, Balmoral in the $1 million to $2.5 million range for detached housing.
• The weakest markets were in the outer suburbs. Areas such as Marsden, Crestmead, Browns Plains and Regents Park are still static with plenty of stock available. There has also been an increase in townhouse construction in these areas, particularly Marsden, over the last couple of years and this may result in downward pressure on rentals given the majority are sold to investors.
So all in all we’ve given ourselves a nine out of ten for our predictions for 2015.
We at Herron Todd White Brisbane would like to take this opportunity to say thanks to all our clients for a terrific 2015. We look forward to your support in the New Year and wish everyone a wonderful holiday season.