Brisbane Poised For Period Of Price Growth

Posted on 27/10/2019  
Brisbane Poised For Period Of Price Growth

The stars are aligning for the Brisbane market with a number of key factors now pointing towards property price growth.

A continual rise in interstate migration numbers, lower vacancy rates and big infrastructure spending have combined to increase demand for Brisbane property, according to Hotspotting’s Terry Ryder.

“Our message today is very much, don’t sell. It is the time to be buying in Brisbane because we think better times are coming to the Brisbane market,” he said.

Mark Shorrock of Bluestone Property Management agreed. “If I owned a property in Brisbane, I certainly wouldn’t be selling, I would be trying to buy another property and benefit from the uplift we are going to see over a number of years,” he said.

Ryder said the Brisbane market had not yet experienced the boom that Sydney and Melbourne had experienced in recent years. He said property price growth as a whole across the Brisbane market had been fairly low, but that was going to change in the next couple of years.

A number of recent surveys, including those published by Property Investment Professionals of Australia (PIPA) and by QBE (Australian Housing Outlook 2019-2022), forecast that Brisbane will lead the nation on investor activity and price growth in the next few years.

Shorrock said investors whose properties he managed had already started to achieve increases in rental returns as a result of tightening vacancy rates. He said this was an “extremely positive” sign.

The latest Australian Bureau of Statistics figures revealed net interstate migration figures for Queensland were on the way up.

“There is a strong pattern of uplift in Queensland’s population growth from interstate migration and in particular into South East Queensland,” Ryder said.

Shorrock said there was renewed interest from interstate people in South East Queensland properties. The last time Queensland experienced solid population growth, when about 1500 people a week where moving there during the mining boom, it had substantially increased rental and capital values.

“At the coal face what we are seeing is an increase in applications from people interstate to rent our properties which is confirmation that population growth and migration rates are improving in our market,” he said.

ABS figures show that in 2018 Queensland had the highest level of net interstate migration, about 25,000 people, well above the second highest state Victoria, which had a net gain of 14,000. At the same time New South Wales experienced a net loss in population of 22,000 people.

“A lot of people are leaving Sydney for all sorts of reasons, including housing affordability, and moving to South East Queensland,” Ryder said. “That is the first of a number of factors that leads us to have some strong confidence that the Brisbane property market is going to be a better performer moving forward.”

 

Ryder said significant infrastructure spending was a major contributor to the boom in values in the Sydney and Melbourne property markets, as it had created the economic impetus that drove property markets.

“Big spending on infrastructure creates jobs and economic activity, which drives demand for real estate,” he said.

While Brisbane had previously lagged in terms of infrastructure spending, that had now turned around with billions committed to major projects.

Shorrock said infrastructure spending had a flow-on benefit for investment property owners particularly in areas which directly benefitted from increased facilities.

Brisbane vacancy rates had tightened in the past 18 months, which Mr Shorrock said was a result of increased demand.

“Now is not the time to sell,” he said. “Why would you be selling a property when Brisbane is now predicted to be the probably the best place in Australia to maximise returns.”

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