I’m worried about the Brisbane property market

I’m a little worried about the Brisbane property market.

frame construction build house property market workNow that’s probably not something you expected to hear from me, especially since I’ve added some significant properties to my Brisbane portfolio over the last few years and my team buy more properties for clients in Brisbane than any other buyers agency, but the truth is….I’m a little worried.

Now…I’ve seen this before – the signs of overbuilding – the usual exuberance from property developers.

You just have to open  Saturday’s paper to see the huge number of new development projects coming out of the ground – and there are even more on the drawing board.

Driven by recent strong investor demand, Brisbane is set to be hit by a wave of new apartments in the coming years.

According to the Brisbane Apartment Market Indicators report by JLL, almost 20,000 new apartments will come on line in the Brisbane over 2016-2018.

Here are the highlights of this report:

  • Currently 19,800 apartments are either under construction or being marketed within the inner city precincts of Brisbane.
    This new supply is expected to be completed over the 2015-2017 period.
  • A further 19,700 apartments are currently proposed or in the early planning stages within the inner city precincts of Brisbane.
  • The Brisbane apartment market has continued to flourish on the back of strong investor demand from both interstate and foreign investors.
  • Due to its value proposition and higher yields, Brisbane will continue to experience steady demand for residential product across all the inner city precincts.
  •  JLL expects the investor market to moderate over the next 12-18 months, as large numbers of new apartments enter the rental market during 2016-2017.
  • As a result rental growth will slow and yields may continue to fall, especially for the generic ‘investor type’ stock.
  • The strong supply pipeline is also expected to limit the pace of capital growth in the apartment market out to 2017.
  • However, opportunities will be available to those willing to service the high-end, owner occupier demand. 

Brisbane Apartments


One factor is the oversupply of properties that is looming, and that’s why I’d be very very careful to avoid buying properties in or close to the CBD.

The looming significant oversupply will mean minimal capital growth and rental growth for properties in and surrounding the CBD.

Another issue is the standard of some of these buildings, and at street level, we could have a situation where there is insufficient open space, wind tunnels and overshadowing effects.


Well first of all there is not one Brisbane property market – there are different markets based on geography, price points and type of property.

And as I explained I have not been avoiding investing in the Brisbane property market, I’ve been investing in selected segments of the Brisbane property market.

In particular we’re buying houses in affluent, gentrifying, middle ring suburbs.

And townhouses and established apartments in the right suburbs.

And we love buying properties to which we can add value. In that way we do the heavy lifting rather than wait for the market to do it.


If you’re not sure what or where to buy and you’re looking for independent property investment advice to help you become financially independent, no one can help you quite like the independent property investment strategists at Metropole.

We’ll help you cut through the clutter of mixed property messages.

Remember the multi-award winning team of property investment strategists at Metropole have no properties on the market to sell, so their advice is unbiased.

Whether you are a beginner or a seasoned property investor, we would love to help you formulate an investment strategy or do a review of your existing portfolio, and help you take your property investment to the next level.

Please click here to organise a time for a chat. OR CALL US ON 1300 20 30 30.

When you attend our offices in Melbourne, Sydney or Brisbane you will receive a free copy of my latest 2 x DVD program Building Wealth through Property Investment in the new Economy valued at $49.

Want more of this type of information?

Shannon Davis


Shannon is director of Metropole Properties Brisbane and as a successful property investor and licensed estate agent, his years of industry experience helps his clients maximize the performance of their investment properties. Visit www.BrisbaneBuyersAgent.com.au

'I’m worried about the Brisbane property market' have 11 comments

  1. November 24, 2015 @ 9:59 am Alex

    I bought a 1br OTP apartment in Fortitude Valley a while ago that’s due for completion late 2017 but since then way too many developments have been approved and I no longer believe it’s a good investment. Should I hold and hope for the best or look into trying to sell it ASAP?


    • Shannon Davis

      November 25, 2015 @ 4:06 pm Shannon Davis

      Hi Alex,
      I think for a number of reasons the Fortitude Valley is a sell – it lacks owner occupier appeal, it has a large oversupply and too many investors, which causes volatility in prices


  2. November 24, 2015 @ 10:33 pm Chloe

    Thanks for the article – watching the construction and DAs coming through this is certainly something that I would agree with. It seems like a bit of a frenzy and no developer wants to be left with “stock on the shelf” so to speak.
    I have a question about your inner south numbers and would think that they are actually higher. There is the Brisbane 1 600 apartments; then there is Pradella, Stockwell, Payce and Aria developments all coming through in the coming 18 months or so. What is your source of research? Thanks!


    • shannon davis

      November 25, 2015 @ 4:08 pm shannon davis

      Hi Chloe – the research is hyperlinked in the report . By JLL research – for your reference


  3. November 27, 2015 @ 10:39 am Tanya

    What are your thoughts on Fairfield as an investment suburb? Thanks Tanya


    • Shannon Davis

      November 27, 2015 @ 3:38 pm Shannon Davis

      Hi Tanya
      There are a lot of flood areas – we prefer closer in on the south . We look for owners occupiers and high disposable incomes on these measures we don’t buy.


  4. November 27, 2015 @ 2:27 pm Terry

    Hi Shannon,

    I recently settled a 2 bedroom apartment in Alex Perry residential @ 959 Ann St. Fortitude Valley for $542,800. It is on the 9th floor with views towards the CBD. The specific area I do find appealing with restaurants, bars, shops etc.

    I bought it off-the plan about 2.5 years ago and now I am receiving a 2 year 7% guaranteed return on it (excluding rates & body corporate). It is being managed by Alex Perry Hotel & Apartments group.

    Would you recommend I hold it for 2 years to receive the 7% or would you be selling it off ASAP with the 7% guarantee in place?

    I have noticed 1 or 2 apartments in the complex recently advertised for sale with 5% guaranteed rental return.



    • Shannon

      November 30, 2015 @ 8:25 am Shannon

      Hi Terry,
      Its likely that the rent return was priced in the apartment price – so its unlikely you will be able to achieve the same price so quickly after the sale. Holding for two years will mean more competition for a sale price in the future. On the positive side there is lots to do in the area and the apartments a little bit further out will feel the pinch.
      Shannon Davis


  5. November 27, 2015 @ 10:02 pm Kathy

    As someone who lives on the almost inner north side of Brisbane, I can certainly attest to the glut of blocks of flats going up on the north side, which has by far the largest amount of building activity according to the chart.

    One of the main reasons, I believe, is that this Council is approving just about every DA that crosses their desks. The brief seems to be to cram as many flats into as small a space as possible. This Council allows through relaxations or downright breaches of the City Plan, Sustainable Planning Act and neighbourhood plans. They allow construction on flood plains and Council engineers will tell you with a completely straight face that development does not contribute to flooding or raise the flood level at all. Perhaps they can explain where they think displaced floodwaters go when development is allowed on flood affected properties or when flood affected areas are raised above the flood line, such as, for example, the Rocklea markets.

    This Council has become lazy and too addicted to the easy revenue from development. Much easier to accept development fees and worry about upgrading infrastructure such as stormwater and roads later. And don’t worry about allocating sufficient car spaces for developments, this is less profit for developers and a lesser continuing income stream for Council. Too bad if roads become car parks and the bike lanes become completely obsolete due to the amount of cars parked in them. This is in addition to the complete lack of open and green space, wind tunnels and homes on either side of developments spending at least half a day or more in the shadows, as mentioned in the article.

    Where I live in Nundah, the Toombul Nundah Neighbourhood Plan and the Nundah District Neighbourhood Plan calls for a diversity of housing types and variety of forms and densities. So far, the only types of development we see in this area are for flats.

    The quality of these constructions is usually abysmal and cheap. Doesn’t matter that they’re all exactly the same, cookie cutter style, tiny flats that only suit a small segment of the market. There is very little built to appeal to the owner occupier and practically no detached or small lot housing. You end up with places like areas around the inner city like Fortitude Valley, Bowen Hills and South Brisbane where the overwhelming majority of purchasers are investors.

    What is going to happen when the yields drop below inflation and there is low, no, or worse, negative capital growth? In addition to the glut of new stock, will we then also see a glut of second hand stock come onto the market at once, when investors are tired of putting their hands in their pockets every month for no return?


    • Shannon Davis

      November 30, 2015 @ 10:59 am Shannon Davis

      Hi Kathy,
      I agree with you that some of the area are so investor centric – it really doesn’t feel like a community. For the most part Brisbane will remain low density with pockets of high density around growth corridors and transport nodes. If you have houses with apartments looking over it really does reduce the owner appeal and therefore capital growth. If you want to keep the character of your area look for Residential A and continuity in the period of houses.
      Shannon Davis


  6. November 29, 2015 @ 5:56 am alanch

    What about unit developments in Milton,Queens land? Is oversupply an issue?


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