The month in review: Brisbane
By Herron Todd White
Brisbane property has been a bit of a heartbreaker over the past few years, offering so much promise, but failing to live up to the hype – and anyone hoping 2017 would prove to be “The Year of the Brissie” will probably be disappointed again.
The hoodoo continues to be employment-fuelled interstate migration and, truth be told, we can’t see anything on the economic horizon to suggest southern buyers will start heading here in droves.
That’s not to say we should be ignored – on the contrary, Brisbane is one of the country’s most forgiving capital city markets. There are very few disappointed long-term buyers in our sunshine state’s big city, provided they stuck with the fundamentals and bought the right property in the right position at the right price. With this historic performance as a foundation, there are opportunities to get into Brisbane and hold tight that will leave you feeling very satisfied with your decision come a market cycle or two.
Inner-city property continues to be our strongest performer. Agents report a reasonable start to the year and if you’re hoping to get into some of our really cool café suburbs such as Paddington, Bulimba, or Woolloongabba, don’t expect to find much under $700,000 as a low buy-in for a modest detached house. While these areas will continue to offer great potential, make sure you seek good quality property with strong tenant appeal for the best long-term results.
Middle ring addresses are experiencing some capital gains fuelled by the affordability wave, and steady growth over 2017 is likely in locations such as Kedron and Wavell Heights. You’re still in the $600,000-plus price points in order to buy something decent, but as long as the land size and position are appealing, then there’s solid real estate to be had.
One of the surprise performers over the past few months has been fringe suburbs. There is a continued shift towards house-and-land packages – particularly from investors scared off by the threat of a looming unit oversupply. While no-one is calling a boom for this once very sleepy sector, activity has been strong. Our team are also noting gains in the western corridor towards the Ipswich region as facilities and infrastructure continue to attract business and residents. Some of the bigger estates in this patch are seeing 30 to 40 land sales per month – and most developers would call this a roaring success.
Prestige property has seen a bit more media attention of late too. In many ways, this sector operated outside the constraints impacting other price points due to many high-end buyers being cashed up and immune from interest rate variations. When the right buyer meets the perfect property, record prices can result. We will probably see a few more of these benchmark sales occur in 2017.
At the risk of saying “more of the same from 2016 into 2017”… it really is more of the same from 2016 into 2017. There is one area where we’ll vary our opinion from previous years.
Herron Todd White Brisbane has always been keen on well located second-hand units as a strategy for those trying to get a foot in the market. They usually offer an affordable option in a great location, and while capital gains aren’t always mind blowing, good tenant demand ensures you can continue to service the mortgage without too much stress. There is, however, a very real oversupply risk looming for investor units in our city as new stock struggles to find demand. This is having a negative flow on to our traditionally solid second-hand unit market. If you buy investor-grade unit stock in particular – new or old – please tread with caution in 2017.
Despite these modest predictions, we still say, “Come on up you Sydneysiders and give Brisbane a go!” because we could use the help.
Oh, and by the way – the old excuse that summer is too hot here in Queensland just doesn’t hold up any longer. While we’ve been complaining about temperatures hitting the low 30 degrees, most other capital cities have been touching into the 40 degrees this summer, so you might as well head north for our more temperate climate and successful football team.
Find out more information and to chat with a local Mortgage Broker in Brisbane.