The Sunshine State capital, Brisbane, is Australia’s third largest city – but hasn’t historically drawn the sort of interest you would expect of the city occupying the northernmost spot on the eastern seaboard of Australia’s state capitals.
But that looks set to change. Brisbane has recently begun to draw the attention of savvy offshore investors. And it appears that Brisbane is set to experience a boom in investment activity to rival the influx of offshore investors that have arrived in Sydney and Melbourne over the past decade.
Investing in property in Brisbane and some of Queensland’s other hubs has presented a unique case for some, as it appears that there is something of a window of opportunity emerging in what has long been one of the region’s most stable markets.
What we at Cohen Handler have seen is the emergence of a unique set of market conditions that will force adaptation in savvy investors in the near-term. But equally uniquely, a long-term outlook that will mirror the steady upward trends Melbourne and Sydney markets have seen in past decades despite these conditions.
Read on below to get a look into what we believe is going to shape the future of Brisbane’s real estate market, and what a smart investment will look like starting from today.
Factors shaping Brisbane’s property market
Real estate in Brisbane, from the outside looking in, appears to be mirroring the gradual upward trend that investors have come to expect in each of Australia’s larger cities. It’s true, Australia as a whole has seen a steady growth in the average property value over the past decades, and that doesn’t look set to change. But a reading of ‘same-same’ isn’t particularly useful to those looking for strong investment opportunities in the Sunshine State.
It would appear that the stable upward trend of the property market in Brisbane would mean that returns in the form of capital growth require more time to crystallise when compared to the still currently faster growing Melbourne and Sydney. Brisbane has not matched the outstanding pace of either of these two cities, but nor has it dipped into the territory that exists below the country’s top three spots with any regularity.
But Brisbane presents an interesting case to prospective investors explicitly because of the difference in growth that the city, and Queensland’s other hubs, have experienced – and the diverging average value of property in each of Australia’s two largest cities, and the next in major cities in line for massive growth.
A window of real estate opportunity in the Sunshine State
The stability of Brisbane’s property market has turned away the sorts of investors that will force a more rapid growth in real estate value. But the increasing divergence of Brisbane’s property market from the rapid growth of Melbourne and Sydney is setting the scene for an oncoming period of more rapid growth.
While the full economic effects of the current COVID-19 pandemic are yet to be fully understood, whatever pressures that the local property market are undergoing will eventually reach a critical mass. Interest from offshore investors, and domestic migration to a more favourable housing clime, are going to be two big factors that push a broader uptick in the growth trend of Brisbane’s local market.
As it stands, it appears that it is simply a waiting game that rewards patience. However, for those looking for a more aggressive strategy in the short to medium term, there are a range of options available to those situated to capitalise on unique windows of opportunity.
A different sort of investment game
A variety of investment options have proven reliable in Brisbane’s property market. For investors and savvy buyers, the most important ingredient is always timing. We’ve touched on the relative positioning of Brisbane’s property market. But what we haven’t yet explored is the unique body of opportunities that exist in Brisbane that aren’t exclusively reliant on a massive uptick in demand across the board.
Savvy investors are looking to the Sunshine State for a different sort of real estate opportunity, and it’s found in an isolated but sustained pocket of the local market.
Brisbane see’s relatively strong rental yields when compared to Australia’s other major cities. And while this is a fact that has not gone unnoticed in the last 12 to 24 months, the commentary surrounding Brisbane’s supply of affordable apartments for the student and young professional demographic tends toward these properties being a solid investment.
How to get started
Brisbane is facing a period of unprecedented growth. But every market has its own potential pain points and an important step in any investor journey is a careful assessment of any potential risks. Whether you’re new to the prospect of investing in property, or you’re an experienced investor that is looking for the support of local knowledge and connections, you can find the support you need here with Cohen Handler.
Our services are designed to ensure that your investment journey is met with the success that you are looking for. With our expert local team of real estate professionals, you’ll have access to the information you need to make informed decisions and seek success in your investment efforts.
We can get you started in Brisbane and equip you with informational breakdowns of prospective investment opportunities, profiles of sub-regions and detailed reports of any properties of interest. Cohen Handler is the organisation that can put local knowledge and experience to your investment efforts and pave the way to success.
How has COVID-19 impacted property investment in Brisbane?
COVID-19 has had an enormous impact on all areas of the Australian property market, and Brisbane is no exception. Coming into Q3 2020, we’ve already seen significant pressure placed on the various residential markets within the city, with all grades of property expected to lose 5-10% of their value in the short-term. However, some analysts are tipping a faster recovery for Brisbane compared to more southern cities due to the city’s affordability as well as increased demand driven by a number of large scale infrastructure works including Queens Wharf and Howard Smith Wharves.
Effects in commercial real estate are likely to be deeper, wider felt and less immediate. With increased uncertainty about cash flow, many businesses have put the brakes on leasing. Combined with far-reaching questions about the role of the office in the future workplace and the rise of permanent work from home programs, commercial real estate is a precarious position that is yet to solidify.
Navigate this unprecedented time with confidence with help from Cohen Handler.
Facts about Brisbane property market
Over the past 18 months, Brisbane has been a quiet achiever within the Australian property market. As Melbourne and Sydney entered pronounced periods of dwelling price decline, Brisbane continued to see its prices grow slowly and steadily.
Key to the Brisbane property market is its affordability. A major driver of internal migration from more expensive markets such as Melbourne and Sydney, Brisbane’s low dwelling prices compared to its above-average wages – prices are nearly half that of Sydney while incomes are only 12% lower – makes it an attractive option for buyers priced out of the country’s two biggest cities.
The rental market remains strong due to high levels of overseas migration – specifically from Asia for the purposes of education. COVID-19 has had a significant impact on this flow of international students, but demand is expected to return once the crisis abates.
A series of large-scale inner city developments are further expected to drive demand for both residential and commercial property, promising a continuously bright future for Brisbane.
Which Brisbane areas are worth investing?
The right suburbs for your next investment will depend on your specific financial goals. If you have the capital and are willing to do the research, purchasing a commercial property could deliver significant long-term returns for your portfolio. Highly developed – but outer suburban – locations such as Caboolture and Deception Bay boast fantastic amenities and a deep, mature market filled with prospective tenants.
Conversely, those looking for residential properties can take advantage of Brisbane’s lower property prices (compared to Melbourne and Sydney) and purchase far closer to the CBD than they could at either of Australia’s largest cities. Popular inner-city (<5km) suburbs such as Ashgrove boast significant family populations, high levels of income and a median house price of around $1 million. For comparison, Middle Park is a similar distance from Melbourne’s CBD, but has a median house price of more than $2.6 million. Combined with the density of universities in the inner-city area and the resulting constant need for student housing, purchasing here could be a significant win for your portfolio.
How to choose a strong investment property in Brisbane
Choosing a strong investment property in Brisbane is the same anywhere. It all comes back to knowing the market. Understand the underlying forces driving prices, the demographics at play and their interests is key. In uncertain times such as these, it pays to have a guide who understands the territory. Cohen Handler has extensive experience helping buyers such as yourself succeed in the Brisbane market. Speak to us today to learn more.
Contact Cohen Handler today
Making your foray into Brisbane’s real estate market doesn’t need to be fraught with uncertainty. Cohen Handler is the team of real estate professionals that can help you make your investment in Brisbane real estate a profitable journey.
Whether you’re looking for a buyer’s advocate in Brisbane to be your eyes and ears, or you’re just looking to learn more about market trends throughout Australia’s fastest moving real estate markets, you can look to us at Cohen Handler. Get in contact by calling 1300 244 768 or emailing us at [email protected].