Brisbane March 2018

The month in review: Brisbane

By Herron Todd White
March 2018

Brisbane is a classic example of a pebble-in-the-pond capital city. Price growth generally follows layout and we have fairly definitive inner, middle and outer rings when it comes to residential real estate. In short, that helps make buying bricks and mortar a bit of a breeze in our river city.

So, middle ring in Brissie is delineated by distance from the CBD.

The inner circle is within the five kilometre radius while the outer reaches extend beyond 20 kilometres. It’s within this fuzzy 15 kilometre band that you’ll find a heap of activity for traditional Brisbane property traders.

A fair example of a middle ring suburb in our northern suburbs would be Wavell Heights.

It’s 13 kilometres by road (8.5 kilometres as the crow flies) from the big smoke and offers mostly those post-war timber homes we’ve come to love here in Brisbane.

In Wavell Heights, $750,000 will see you buying a modern 4-bed, 2-bath abode on a reasonable size allotment with access to decent schools and shops. For the more budget conscious, you can land yourself one of those post-war properties with a bit of a contemporary update at around $600,000 to $700,000, while homes below this bracket will definitely need some love from the renovator’s paint brush.

Unit buyers will score the lowest priced accommodation with $450,000 sure to land you attached housing with plenty of space. Expect to see 1970s style unit blocks of three-story walk-up design.

On the south side, the same could be said for a suburb such as Mount Gravatt which is positioned nine kilometres in a straight line from the CBD. Price points and property types are similar although there are probably a larger number of very tidy brick builds in Mount Gravatt that appeal to family buyers. Units similarly offer an affordable option for budget conscious owners and investors, with three-story walk ups again featuring in the area.

Our mid-ring locations always contain a broad demographic base. There are retirement age homeowners, many considering their next move towards low maintenance accommodation. Some will stay in the area and opt for smaller homes or villa style units while others may head to the coast.

Mid ring is also fairly active for families because mum and dad want to ensure the offspring have plenty of yard space to romp in – and our city’s relative affordability makes that possible within a commutable distance of town.

For all these reasons, there’s great demand from tenants as well with rental yields set to be a touch better than those achieved in suburbs closer to the CBD.

So where do the mid ring opportunities lie in Brisbane?

We think middle ring real estate is the very definition of buying the fundamentals. Great sized blocks with appealing homes – many with renovation potential – and in areas with good links to transport, services and other facilities.

Our pick would be to seek out detached homes priced between $500,000 and $600,000 in suburbs such as Stafford, Stafford Heights and Chermside West. These properties could probably do with a bit of an update, but that’s where you can make some equity gains. A coat of paint and basic upgrade to the fit out will pay dividends. And there’s plenty of buyer demand for attractive homes in these addresses.

The long term outlook remains strong for mid ring too. As the inner circle becomes less and less price accessible, the popularity of middle ring homes will rise. While we aren’t yet predicting runaway boom time price growth, all the signs are that owners can expect to see steady, ongoing value gains throughout the market cycle.

Moreton Region

The Moreton Region wouldn’t be considered middle ring under the definition of Brisbane property, however an avid Month In Review reader asked us to please give an update on how real estate is playing out in this band between Brisbane and the Sunshine Coast. They were so polite, we couldn’t say no.

Mango Hill and North Lakes are approximately 26 kilometres north of the Brisbane CBD and are well serviced locations with schools, business and industrial precincts, Westfield shopping complex, Ikea, Costco and a golf course. They’re also well connected with two train stations in Mango Hill, bus interchange at North Lakes and multiple highway entrance points.

Typical property in these locations provides good quality low density housing, interspersed with higher density units and townhouses closer to retail amenities.

2017 saw a slight increase in prices for the existing housing market. Development in North Lakes construction has eased and Capestone at Mango Hill (an Urbex development) has approximately two to three years (or 400 to 500 lots) until completion. Construction of the lake has recently commenced and construction of the retail precinct and child care facilities is due to commence mid-2018.

While these areas are becoming popular with investors due to their easy access to amenities, the market has been predominantly driven by owner occupiers, particularly younger families and a mix of first home buyers and trade up market.

There is opportunity in this location to buy second hand homes (approximately ten years old) of investor quality below $500,000 with strong rental demand.

Ipswich

While some may simply consider Ipswich to be the outer reaches of Brisbane’s west, we’re here to confirm it’s a city in its own right with a formidable property market.

The middle ring of Ipswich is less defined than Brisbane, with pricing across the council area fairly tight in a fairly tight band. That said, there are important considerations for middle ring Ipswich buyers looking to profit.

Raceview to the south is typical middle ring, comprising mainly post-war style homes with semimodern estates scattered throughout. Prices sit around $300,000 to $320,000 for homes in these projects.

Woodend, Sadliers Crossing and Coalfalls to the north west of the CBD are also examples of the city’s older style middle ring. Most homes are pre-war and prices range from $350,000 to $500,000. Above this mark, expect to get plenty of home for your dollar, but the available buyer base is a bit limited and you’re unlikely to achieve a quick sale when listing your holding.

Booval to the east is a mix of post and pre-war homes with pricing around $280,000 to $320,000.

Ipswich has been garnering plenty of interest of late. The city has seen an upswing in infrastructure activity and housing is relatively affordable compared to Brisbane – these are both major selling points for investors.

Those looking to enter the market will find decent yields and can expect long term growth to be steady and consistent. It’s a fairly forgiving market in that Ipswich doesn’t tend to see huge price fluctuations through the cycle. Activity will slow in a downturn, but most sellers seem able to hold out until demand is on an upswing.

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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.