Is the Brisbane market ready to take off?
Sydney and Melbourne have clearly been the stand-out cities in terms of capital growth over the past year.
For investors around the country and overseas, attention has now turned to finding the next Australian city ready to boom, and there’s more than one expert tipping Brisbane to take the mantle.
Although the Brisbane property market has been in the doldrums for some time, following the Global Financial Crisis and vast flooding in 2010 and 2011, the key indicators are certainly pointing to an emerging growth phase.
Auction volumes are increasing, more sales occurring, the average time on market is shortening, vacancy rates are relatively low and there appears to be growing interest from interstate investors.
Research house, BIS Shrapnel, forecasts growth of 17% over the next three years and there are already signs of growth with the median house price on an upward trend.
What’s driving the growth? Low-interest rates are one factor but given that rates have been low for some time it’s probably more a case that confidence is now re-emerging.
With expectations of growth, many more buyers are deciding to upgrade while there is still value in the market.
Local buyers are being joined by those from interstate, who either made money in Sydney or Melbourne or missed out on the recent upswing and are searching for higher yields and growth potential.
Historically, Brisbane has always lagged behind Sydney by about 12 to 18 months.
Brisbane continues to record rapid population growth and the city has its own supply-constraint issues, which are fundamentally driving the market.
The economy has always been strong and there is currently considerable infrastructure spending underway, adding more fuel to the fire.
All of this is adding up to a positive outlook for the property market over the short-term. There is, however, plenty of development activity happening in the city, especially with regard to apartments, so there is the potential for an oversupply and poor performance in some areas.
Investors looking to get into the Brisbane market – especially those from interstate – should certainly tread carefully and seek expert help from a professional they trust.