How has the Brisbane property market actually performed? | Michael Matusik

Well, given that Brisbane is the flavour of the month property-wise of late, some of the promoted claims about the Queensland state capital’s past performance are separating from reality.

Now, we do expect a bit of GST in most property advertising & commentary these days, but some are pushing out statements that are just plain false.southbank-brisbane-queensland

For example, in a recent brochure I saw a statement claiming that “Brisbane housing has outperformed most other Australian capitals – including Sydney & Melbourne – when it comes to both price & rental growth over the past ten years”.

Hmmm.

The graphic below shows, for the record, what has happened by price & rent for both detached homes & attached dwellings (apartments & townhouses) across the eight capital cities.

Brisbane property marketBrisbane’s position

Brisbane is typically in the lower half of the field.brisbane

Often, Sydney & Melbourne – in terms of price & rental growth – have done better. Perth & Darwin are clear winners when it comes to the last decade.

As we outlined in our Missives last week – visit here  – there is a property cycle & the Brisbane property market is now well into the recovery phase of that cycle.

By comparison, Sydney, Melbourne & Darwin are approaching a market peak.

Perth & Canberra have entered a downturn, whilst Hobart remains in stagnation. Adelaide, it would appear, is about to enter into a recovery.

What’s next is what matters

All things being equal, over the next period of time, Brisbane property should see more generic growth than the other Australian capitals.

And as the Brisbane market improves, we are going to continue to hear a lot more about its past property glories.

The graphic above shows that – at least over the past ten years – Brisbane’s property brilliance has been okay, but nowhere near the national leader it is sometimes (increasingly) made out to be.

Better yields

[sam id=43 codes=’true’]

It would be more accurate to promote Brisbane’s gross rental yields as being better than many other capitals, including Sydney & Melbourne.

This has often been the case & in recent years, gross rental returns have been improving in SEQ whilst falling, or at least remaining steady, in many other Australian capitals.

For example, the average gross rental return for a detached house in the greater Brisbane area is 4.1%, compared to a 3.5% average for the other capitals.

Attached dwellings in Brisbane attract, on average, gross rental yields of 5% – a full half a percent higher than the average. Sydney & Melbourne, at present, deliver gross rental returns in the low to mid 3% range.

Gross rental yields of around 5%, typically for mine, represent fair investment value.

Higher returns (say, over 5.5%) suggest undervalued property (assuming the rent is sustainable) & lower rental returns (say, under 4.5%) suggest overvalued passive investment property.



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Michael Matusik

About

Michael is director of independent property advisory Matusik Property Insights. He is independent, perceptive and to the point; has helped over 550 new residential developments come to fruition and writes his insightful Matusik Missive


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