The Smartline Report – July Edition

The month in review: Brisbane

By Herron Todd White
July 2016

As we’ve said before, although Brisbane is the good husband of capital-city property – solid, safe, reliable but fairly unexciting – it has generally failed to fire at the level expected by most since 2012.

The problem appears to be a continued lack of confidence with the deflation of the Queensland mining boom casting a grey fiscal pallor across the capital city. Employment is still reasonably soft and our really hot, hot, hot property years have always come on the back of increased interstate migration – and that’s still refusing to take off.

For this reason, last years choices of property at this price point are still applicable in many instances today, and worthy of consideration once more.

Of course, while this says the market has been flat, there’s a silver lining amongst these musings – it’s that Brisbane’s CBD-accessible suburbs remain relatively affordable.

For Brisbanites, anything outside the 10 kilometre radius is a bit of a trek into town, but of course spend a few years in Sydney (or London or Tokyo or any other international city), and you begin to get the idea that 10 kilometres is actually less than a serious jog for a fun runner. Of course, heading up to 15 kilometres breaks open the affordability, while only adding a touch more driving for the commuter.

For dwellings outside 14 kilometres of the CBD, Algester has been one suburb that’s seen more interest in recent times partly due to the flow on from increased prices in Sunnybank Hills and Runcorn in the past 12 months. Algester also sits reasonably close to our pick suburbs from last year’s Lazy $500,000 issue – Eight Mile Plains and Runcorn.

On the north side last year, we picked Brighton, Sandgate, Deagon, Boondall, Taigum and Bracken Ridge to find the sub-$500,000 stuff and a keen eye could still find detached housing options in this bracket and at these addresses.

On the bayside, suburbs such as Redland Bay are still sub-$500,000 and there is a good level of interest, which bodes well for the medium term.

Looking further afield in the south and suburbs like Marsden, Woodridge and Logan offer heaps of value with plenty of property around $300,000. These suburbs continue to appeal to investors at present given rents for highset 3-bedroom, 1-bathroom homes are approximately $360 per week at this price point – so yields are healthy.

Older style 2-bedroom, 1-bathroom units in Greenslopes and Coorparoo are still below $500,000 – actually most are closer to the $400,000 mark. This isn’t much of a change from last year when we were saying the same product could be found in the high $300,000s. So if you’d followed our call from last year, you’d have made a few thousand dollars in equity and still have the prospect of more growth in the medium term. These suburbs appeal with good facilities and reasonable access to the CBD, although rental yields are staring to tighten and may continue to do so – particularly with Coorparoo Square due for completion in the next 12 months.

Last year we were warning investors in our loudest possible voice to be extremely cautious of off-theplan unit stock – and we’ve been proved correct. We continue to say that it’s a brave investor who takes a punt on this sector at present in oversupplied suburbs. If you are anywhere near considering this type of property, please give our office a call and commission some independent advice before you sign on the dotted line.

Please note that information in this publication is subject to change without notice. Smartline assumes no responsibility for any errors, omissions or mistakes in this document. © Smartline Home Loans P/L 1999 – 2016. Australian Credit Licence Number 385325

Share on:

DISCLAIMER: The information contained in this article is correct at the time of publishing and is subject to change. It is intended to be of a general nature only. It has been prepared without taking into account any person’s objectives, financial situation or needs. Before acting on this information, Smartline recommends that you consider whether it is appropriate for your circumstances. Smartline recommends that you seek independent legal, financial, and taxation advice before acting on any information in this article.