What’s ahead for Brisbane’s property market?

Is it the right time to follow the sun and move into the Brisbane property market? 

That’s a question now being asked by more and more property investors who have been priced out of Australia’s two big capital cities.

While currently property values are falling in many parts of Australia, the Brisbane property market seems to be steadily gaining pace and the prime beneficiary of Sydney and Melbourne’s slowdown.

More families and downsizers from the southern cities are moving to South East Queensland to cash-in for a lifestyle in the sun and this has made Queensland Australia’s #1 destination for internal migration.Brisbane property market

With improving economic growth and jobs creation supported by the biggest infrastructure spend since the 2011 flood recovery, more and more investors are now looking for opportunities in Brisbane where properties are more affordable, rental yields are relatively higher and future prospects for the market look bright.

Looking ahead, economic forecaster BIS Oxford Economics says Brisbane will lead the capitals, with the value of Brisbane properties forecast to surge as much as much as 20 per cent over the next three years as economic growth underpins buying in the city’s relatively affordable housing market.

 

 

Are they right?

Is the Brisbane property market a good place to invest?

Like most things in real estate the answer is – it depends. 

propertymarketupdate

Brisbane is one of the world’s great cities.

Liveability, affordability, scale and future economic prospects all suggest that Brisbane is a market where you can confidently buy.

It’s true that Brisbane is likely to be the best performing property market over the next few years, however while some locations in Brisbane have strong growth potential, and the right properties in these locations will make great long term investments, certain submarkets should be avoided like the plague.

To help you make an informed decision, I’m going to examine what’s going on in the Sunshine State in detail in this blog.

But be warned…it’s a little longer than normal, so if you’re looking for a particular element of the Brisbane property market, use these links to skip down the page. 

Fast Facts About The brisbane property MarketFast facts about the Brisbane property market
What’s Special About brisbaneWhat’s special about Brisbane
What brisbane areas Are Worth Investing InWhat Brisbane areas are worth investing in?
How Do I Choose a Strong investment property In brisbaneHow do I choose a strong investment property in Brisbane?
How Can I Stay On Top Of Current InformationHow can I stay on top of current information?

Clearly Brisbane isn’t “one” property market

There are multiple markets in this diverse sprawling city; divided by geographic location, price point and property type.

Currently some markets are hot, while others are not.

And just to make things clear…

I’m talking about the property market in Brisbane – not the Queensland property market. That’s a very different animal!

If you’ve been following my property investment strategy, you’ll know I only invest in capital cities and that’s why I avoid the Sunshine Coast, the Gold Coast and Queensland’s regional markets which have very different (and fewer) growth drivers than Brisbane and are therefore more volatile.

Fast facts about the Brisbane property market

 

1. Brisbane Property Market Prices

Brisbane property is finally going to have its turn in the sun with reasonable growth likely for well located, free standing houses and townhouses in small complexes.

BrisbaneWhile the overall figures for the Brisbane housing market remained flat over the last year the markets are very fragmented.

Corelogic report that house prices grew 0.1% over the last 12 months while apartment prices fell 0.5%, but digging deeper into the stats freestanding Brisbane houses with 5-7 km of the CBD or in good school catchment zones have grown in value strongly.

Many of the properties purchased for clients of Metropole’s Brisbane office showed double digit capital growth over the past 12 months –  that’s how averages work isn’t it? Some properties over perform while others underperform.

However, it will be some time yet before the oversupplied apartment market starts to pick up.

Brisbane’s economy is being underpinned by major projects like Queen’s Wharf, HS Wharf, TradeCoast, Cross River Rail, the second airport runway and the Adani Coal Mine, but jobs growth from these won’t really kick off for a few more years.

In the meantime, a healthy level of affordability at a time of increased interstate migration from Sydney and Melbourne and the return of local and interstate investors seeking strong rental yields plus capital growth should help make 2019 a good year for Brisbane property.

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Brisbane Real Estate

 

Brisbane City CBD, Queensland, Australia

The general slowdown in capital gain comes despite population growth ramping up and the Queensland jobs market showing a marked improvement relative to previous years.

The Brisbane apartment market has been the focus of much negative attention due to excessive supply levels, however recently Brisbane unit values have started to edge a bit higher, which may be a signal this sector of the market has bottomed out.

Unit construction peaked in late 2016, so supply concerns are starting to become less pressing.

The value gap between the East Coast capitals is compelling – it is the largest it has ever been between Brisbane and Melbourne and the largest in 15 years with Sydney, according to CoreLogic.

A typical house in Brisbane is $437,000 cheaper than Sydney and $260,000 cheaper than Melbourne.

This level of affordability, coupled with positive economic signs means Brisbane is primed for future growth.

Within Brisbane, southern migrants and local upgraders are favouring premium property in blue chip inner ring areas close to the CBD and or the river.

This has led to above average growth in desirable neighbourhoods like:

  • Hamilton (median house price up 38.5% to $1.565 million),
  • Paddington (up 15% to $1.15 million),
  • Bulimba (up 11.3% to $1.307 million) and
  • Auchenflower (up 9.5% to $1.095 million).

The annual change in dwelling values to the end of 2018 has ranged from a 3.5% rise across the Western suburbs to a 1.4% decline at Ipswich, but as you can see form the stats above, some suburbs have clearly outperformed.

 

 

2. Brisbane’s Property Market Trends  

A solidly performing Brisbane property market beat predictions of doom and gloom against a backdrop of cooling southern markets and falling listings volumes, as the Brisbane housing market demonstrated admirable resilience, buoyed by steady population growth driving demand and underpinned by good economic fundamentals.

REIQ CEO Antonia Mercorella said the strength of growth proved that Queensland real estate was a good investment and could be relied upon to deliver capital growth.

“While other markets around the country are struggling in the face of tightened lending criteria and cooling investor appetite, the southeast corner of Queensland continues to deliver steady, sustainable growth,” Ms Mercorella said.

“Queensland’s economy is proving itself to be a good performer, against a backdrop of national gloom, with new jobs bringing population growth and demand for housing,” she said.

“The southeast corner is our powerhouse, without a doubt, but additionally we’re seeing strong results in regions that have been struggling.

“The resources sector is improving and we’re seeing regions such as Mackay and areas of western Queensland firmly in recovery.”

The apartment market has not fared so well and has delivered largely softer results across the state as this product battles against oversupply issues.

graphic-brisb-new

However rising demand will slowly absorb this excess stock, the only question remaining was just how long that would take.

Queensland has become the number-one destination for internal migration, taking over from Victoria in the latest ABS Census data, and our overseas migration is at its highest level in years, which means demand for accommodation will continue.

As always, the market will remain fragmented.

In the last year alone some areas underperformed, 68 suburbs far exceeded the average level of growth and almost a dozen Brisbane suburbs had double digit price growth over the last year.

 

3. Brisbane’s  Rental Yield s

The good news for property investors is that rents are slowly on the way up in Queensland.

Brisbane rents

According to the SQM, Brisbane’s gross rental yield for houses was around 4 per cent and for units was closer to 5 per cent

Brisbane rental yields.

 

4. Brisbane Capital Growth 

While Brisbane property prices are considerably more affordable than the other 2 east coast capital cities, Corelogic forecasts that one in 10 houses sold in Brisbane will fetch more than $1 million within 2 years.

Dwelling Bris

 

The Brisbane property market is likely to record positive grow in the order of 3% to 5% this year as the underlying market drivers are now strengthening.

BIS Oxford’s 3 year forecasts to 2021 suggest that Brisbane will see the strongest growth of any property market over the next three years, jumping 13 per cent to a median of $620,000.

They expect Brisbane’s property market to continue to perform well at a time when many other markets are languishing.

The affordability factor, with Brisbane’s median house price now far lower than Sydney and Melbourne, as well as higher rental returns, is likely to drive more interstate investment into the city.

Local affordability and the lifestyle advantages has resulted in strong interstate migration (+17,426 last year) up 50.5% from previous year.

At the same time 12.7 percent of our overseas migrants are settling in Queensland and interest from foreign investors is rising.

Houses in Brisbane’s inner and middle ring suburbs offer the best prospects of long term capital growth.

What’s special about Brisbane?

 

5. Brisbane’s demographics

According to the Australian Bureau of Statistics 2016 Census the population of Greater Brisbane which encompasses the local government areas of Brisbane, Logan, Ipswich, Redcliffe and Moreton Bay is 2,270,000.

This is less than half the population of its southern east coast cousins – Sydney and Melbourne.

Brisbane Census

 

According to the 2015 Intergenerational Report the population of Australia is expected to almost double by 2055, with Queensland also becoming home to more than seven million people over the next 40 years.

Given its sub-tropical climate, the region is well known for its laidback lifestyle and enviable weather.

Greater Brisbane also has far more affordable property than the southern cities of Melbourne and Sydney.

 

6. Brisbane’s layout

Brisbane,  is a sprawling city with outlying suburbs up to one hour drive from the city centre.

Sprawling along the Moreton Bay floodplain, Brisbane stretches from Caboolture in the north, to Beenleigh in the south, and as far as Ipswich in the west. South Brisbane

Winding around the Brisbane River the city is rather hilly, with prominent rises including Mt Coot-tha, Enoggera Hill, Mount Gravatt, Toohey Mountain and Highgate Hill to name a few.

The Central Business District  itself is fairly well laid out but it can be tricky to navigate through with all the one way.

If you ever get confused a golden rule for the CBD is that the streets with female names (Margaret, Ann, Queen etc.) run parallel to each other and the streets with male names (Edward, George etc.) also run parallel to each other.

The CBD is still in the original settlement location in a curve of the river about 23 kilometres upstream from Moreton Bay.

The river acts as a natural divide with the city colloquially broken into two sections, namely “north of the river” and “south of the river”.

The inner-ring of suburbs of Brisbane are classed as between zero and five kilometres from the CBD, the middle-ring from five kilometres to about 12 kilometres and the outer-ring from the point to the start of the borders of its Greater Brisbane’s regional councils.

In spite of the hilly areas of Brisbane, much of the city exists on the low-lying flood plains, with several suburban creeks throughout the suburbs joining the Brisbane River.

These low-lying areas on the water’s edge increase the risk of flooding.

7. Brisbane’s infrastructure

Economic growth in Queensland is projected to accelerate from 2.5% last financial year to 3% by Financial Year 2019, supported by the biggest infrastructure spend since the 2011 flood recovery

This was announced in the FY19 Budget in June 2018.

There are many multi-million dollar projects happening in and around Brisbane at the moment, that are starting to create jobs and more importantly get the economy rolling again.

One of the biggest would have to be the addition of a second runway to the Brisbane Airport and you would hope so too, at a total cost of around $1.3billion.

The project is due for completion in 2020 and after 8 years in the making, will become Australia’s largest aviation construction project.

It has already provided hundreds of construction jobs and by 2035, it is expected to generate up to 8,000 new jobs and generate an additional $5billion dollars to the Brisbane Economy.

To put that into perspective that is almost half the economic output of a Regional town like Toowoomba or more than a third of the output of the Sunshine Coast economy.

The huge project will increase Aircraft capacity to around a staggering 110,000 movements per hour and Brisbane is set to become the gateway to the rest of the country, in particular Asia.

Capitalising on opportunities from the Asian Century, there are many major tourism projects with a combined value of $30 billion scattered up and down Queensland’s coastline.

New resorts – and upgrades of existing resorts – are slated for Brisbane, Ipswich, the Gold and Sunshine coasts, Rockhampton, Mackay and Cairns.

While new infrastructure is an important element for investors to consider, it doesn’t necessarily lead to property price increases and sometimes can be detrimental to an area through increased traffic, noise or pollution.

8. Brisbane’s economy

While all the economic key pointers are heading in the right direction, it is the Queensland Economy that needs to kick into action.Brisbane

Many local experts have been commenting recently that without the higher economic growth our house prices cannot reach anywhere near the heights of a Sydney or a Melbourne.

Brisbane is Queensland’s economic engine room – a growth city with a strong history of economic performance and significant infrastructure investment.

According to the Brisbane City Council economic fact sheet Q2 2014, Greater Brisbane’s economy has rapidly expanded to be worth $135 billion, representing 47.1 per cent of Queensland’s economic output in 2012-13.

Queensland’s job creation is quite strong but the unemployment rate remains stubbornly high

The trend unemployment rate in Qld was reported at 6.1% in June 2018, slightly higher than the 6.0% recorded a year earlier.

Over the past 12 months, Qld has created 62,739 jobs.

Based on 62,739 jobs created over the past year, total employment has increased by 2.6% which has accounted for 19.6% of all jobs created nationally.

job growth Queensland

Despite global uncertainty, the economy is predicted to be worth more than $217 billion by 2031, according to the Brisbane City Council Economic Development Plan 2012-2031. 

9. Brisbane’s Population Growth

Queensland has led the nation in net interstate migration over the past year

The population of Queensland increased by 81,461 persons over the 12 months to December 2017 with Queensland accounting for 21.0% of the nation’s population growth over the year.

  • The 81,461 person increase in population was split between: natural increase of 29,602 persons, net overseas migration of 29,349 persons and net interstate migration of 22,510 persons.
  • Over the year, natural increase was the lowest it’s been since June 2006, net overseas migration was the lowest it’s been since June 2016 and net interstate migration has increased for 12 consecutive quarters and is at its highest level since September 2007.

Queensland population growth

 

And the population of Greater Brisbane is expected to continue to experience solid growth over the coming 10 years according to a report by Place Advisory.

The Australian Bureau of Statistics has predicted strong population growth at an average of 62,410 people in Brisbane per year over this period.

In 2018, the growth rate is projected to be 2.3% decreasing to 2.1% in 2026 and remaining steady.

Greater Brisbane Population Projections

Population Projections Greater Brisbane

Whilst, family households are expected to see the largest increase over the next 10 years, the Australian Bureau of statistics projects that lone person households will have the highest growth rate leading into 2028, averaging a 2.4% increase per annum.

This is followed by family households which have a projected average growth rate of 1.8% per annum over the same time frame.

Group households are set to see the smallest growth rate at an average of 1.4% per year.

Greater Brisbane Household Projections

House Hold Projections Greater Brisbane

 

10. Brisbane’s culture

Given its sub-tropical climate, Brisbane is well-known for its outdoor lifestyle, especially the plethora of dining options along the Brisbane River in residential and restaurant precincts such as Teneriffe, Bulimba, New Farm and West End.

Brisbane is no longer a “big country town” in fact it’s a veritable hotbed of cultural and creative offerings, festivals and events, according to experts.

Exclusive blockbuster exhibitions and inspiring theatre productions sit alongside independent and emerging local performances, outdoor cinema, street art and intimate gallery and performance spaces.

Lovers of comedy, musicals, live theatre and dance head to the Brisbane Powerhouse and QPAC.

The Queensland Museum and QAGOMA offer free entry to permanent exhibitions.

Fortitude Valley and West End are go-to destinations for local live music gigs and DJs, while international acts visit the Brisbane Entertainment Centre or Suncorp Stadium.

And while Brisbane is Australia’s third largest city, tenants don’t necessarily want the same features as renters in Sydney and Melbourne.

What Brisbane areas are worth investing in?

So where should an investor start looking?

Like everywhere else in Australia, the Brisbane property market will be driven by demographics – where people want to live, how they want to live and how much they can afford.

That’s why I only invest in areas where the locals’ income is growing faster than the national averages.

Think about it… in these locations locals will have higher disposable incomes and be able to and should be prepared to pay a premium to live in these locations.

Many of these locations in Brisbane are the inner and middle ring suburbs which are gentrifying as these wealthier cohorts move in.

There are great investment opportunities in these suburbs in houses and townhouses.

You know how they say “the best indicator of future performance is past performance.”Suburbs

Now that’s not always correct, but obviously the longer a suburb has outperformed the more likely it will continue to at least perform well and at best remain a star performer.

In Aussie’s 25 year property trend report CoreLogic has identified the best performing suburbs for price growth over the past twenty five years, based on change in median prices between 1993 and 2018.

While the Brisbane property market has been generally subdued compared to the other east coast capitals,  of course there is not one Brisbane property market and as you can see from the table below, these top 20 Brisbane suburbs all grew at an average of  more than 7% per annum which meant property values more than doubled every 10 years – if you bought in the right suburb – and then of course you had to own the right property in that suburb.

This forms part of the research data we use at Metropole to help our clients find investment grade properties, or A grade homes for owner occupation.

If you’d like to get the independent, award winning team at Metropole on your side to help you through the maze of mixed messages about the Brisbane property market, please click here and leave us you details or call us on 1300 20 30 30

Overall the various suburbs in Queensland show a dramatic range in performance, highlighting both the diversity in housing stock around the State, and no doubt that next twenty five years will show an equally diverse result.

Top 20 Brisbane suburbs for capital growth

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Consider school zonesSchool Zones

There’s no doubt that proximity to popular education catchments influences property prices in Brisbane.

This is true of both primary and secondary school catchment zones, which have in general outperformed the market and are likely to continue to do so.

Education is a long-term consideration and, whether you are planning a family, have children already enrolled in school, or are an investor looking to attract long term, quality tenants, it may be beneficial to consider school catchment zones when you are determining suburbs of interest.

Some advice for new Brisbane investors?

11. Look for Brisbane’s best properties in the inner- and middle-ring suburbs.

Research shows that those suburbs close to the city centre generally perform better than all others over the long-term.

ad_build_wealth

Our research at Metropole shows that (in general) properties closer to the CBD and closer to water increased in value faster than those further from the CBD and further from water.

And this general trend has again been confirmed by a paper by the Australian Housing and Urban Research Institute, which found that both in percentage terms and in absolute terms over the long haul suburbs located reasonably close to the CBD, where demand is high, close to employment and where the most people want to live and where there’s no land available for release, outperformed the outer suburbs.

One of the significant changes to occur in Australian cities over the past 50 years, and which has pushed up inner- and middle-ring suburb property values, is gentrification.

Interestingly this wasn’t caused by deliberate planning policy, but resulted from a set of demographic changes that have occurred in most major capital cities around the world.

The exodus of industry, migrants and many workers made way for gentrification of our inner suburbs where initially house prices and rents were cheaper than in the suburbs.

Later, our changing demographics with declining household size, in part because we were getting married later and having fewer children, meant that small inner suburban dwellings or apartments provided ideal accommodation for the expanding cohort of professionals who worked in or close to the CBD.

Gentrifiers were initially drawn to these inner suburbs by the diversity of jobs, educational opportunities and lifestyle and this trend continues today as more and more Australians are swapping their back yard for.

You may also want to watch this video: 5 Important Things Interstate Investors Need To Know Before Investing In Brisbane.

12. 4 Suburbs that MUST be on your radar

With leading Economists tipping Brisbane to lead the nation for capital growth over the next few years, I suggest you do your research before jumping on in!

Brisbane Market UpBIS Schrapnel has predicted 13% growth for Brisbane out until 2021 and a recent report by QBE Insurance has predicted 11%.

Whatever the outcome, it is clear that Brisbane will continue to tick over with steady growth, while the rest of the nation takes a breather.

While Brisbane houses have only averaged around 25% growth over the last 5 years (or 5% per annum), these suburbs have outperformed and will continue to do so;

The Entry Level Suburbs

Budgets starting $530,000 – $600,000

Yes, my Sydney and Melbourne friends, it is possible to buy a house within that budget!

We have been buying in Keperra and Chermside West now for a number of years and for a number of reasons.

These suburbs sit around 9-10km from Brisbane and are the furthest out we recommend buying.

Let’s take a look at some of the data*;

Keperra

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The appealing thing about Keperra for us gets down to the Demographics.

Firstly, nearly two thirds of people own or are paying off a mortgage, a high owner occupier percentage.

Weekly Family Income has continually hovered above the Queensland average but in recent years, it has started to move even further ahead.

KeperraThe most common Occupation in this location is Health Care and Social and according to the Queensland Government, this is going to be the fastest growing sector in Brisbane over the next few years and with our ageing population there will always be work.

These higher incomes and job certainty, mean that people will have more to spend on their home and be much more comfortable in doing so.

Adding to that, Keperra is also a train station suburb and according to Matusik research, suburbs close to rail have grown 40% more in value over the last decade in Brisbane.

In the last 5 years, while Brisbane has averaged around 25%, Keperra has almost 30% in the same time.

The future is bright and if you know where to find the superior pockets, you will be handsomely rewarded.

Chermside West

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Chermside West has very similar Demographics.

Income and Occupation is very similar and owner occupier percentage is almost 80%!.

We are seeing this suburb really gentrifying as social housing and retirees move out, they are being replaced by younger professionals who are targeting the nearby Craigslea State School catchment.

Chermside WestThe suburb also boasts two hospitals that draw health care professionals to the area and it benefits from the development of neighbour Chermside into a type of Satellite City.

While many investors are attracted to Chermside, we would prefer Chermside West, with its favourable Demographics, higher owner occupier percentage and superior school zone.

You also get all the benefits of all the Chermside upgrading without having high rise and business on your door step.

The numbers tell the story here also with a rise of 36% over the last 5 years, well above the Brisbane average.

Other Entry level suburbs to keep an eye on;

  • Stafford Heights
  • Mitchelton
  • Everton Park

Middle RingMiddle Ring

Budgets starting from $650,000+

Starting to get closer in now and there are a number of good suburbs that sit around 6 or 7km to the Brisbane CBD.

Our pick currently is Cannon Hill.

Here is some of the research;

Cannon Hill

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Weekly Incomes in Cannon Hill have soared dramatically over the last few decades.

From almost being level with the Queensland average back in 1991, the last decade has seen a dramatic increase in wages and our expectation is that this will continue.

Again, it has a greater level of owner occupiers with around 70% either paying off a mortgage or owning their property outright.

Cannon HillIt also has a lot of the tick boxes a family is looking for with access to good schools, green space, a bus and train line and easy access to our bugger employment hubs.

There is also a big trend to low maintenance living and with many bigger blocks having been subdivided over the years, land is now at a premium.

We have chosen Cannon Hill for it’s access to our ever expanding CBD, but also is the closest southern suburb to benefit from the Brisbane Airport precinct expansion.

The suburb has also seen around 30% growth over the last 5 years on average.

Other middle ring suburbs to keep an eye on;

  • Holland Park
  • Tarragindi
  • Toowong
  • Kedron

AshgroveThe bullet proof 5km ring

Budgets starting from $800,000+

Suburbs within the 5km ring are starting to resemble all the traits and pricing of some of our southern capitals, but one suburb that still offers value is Ashgrove.

Ashgrove is around 4km from the Brisbane CBD and has an excellent reputation for being a popular family suburb.

Here is some of the data;

Ashgrove

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The Demographics and Incomes here are increasingly very strong, with many in the professional and services-based industries and incomes heading toward twice the Queensland average.

The suburbs average age is 40 – 59, so families generally come first in this suburb, there is no surprise to see some of Brisbane’s best and most highly sought-after schools scattered throughout the streets.

It has a very leafy, green feel with walking paths and tracks and plenty of green space and combined with a number of larger character homes that have been restored and renovated it has found a great balance for an inner-city location.

Adding to that the easy access to shops and lifestyle precincts with high walkability it will remain in high demand moving forward and has already seen more than 36% growth over the past 5 years.

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Other inner ring suburbs to keep an eye on;

  • Auchenflower
  • Bardon
  • Wilston

BrisbaneWith Brisbane tipped to lead the nation for capital growth over the shorter term, it will see interest rise in the Brisbane market.

While there will be opportunities available for almost every budget, it is important to understand the intricacies of each suburb.

Even within these locations I have mentioned, I would be reluctant to buy in some streets and pockets within these suburbs.

It takes on the ground knowledge and some content to understand the less desirable areas, the flood locations and undulating areas.

On the flip side, if you get the location right, you will be rewarded with above average capital growth and be able to set yourself up for the next stage of the property cycle, while others tread water.

* Sources Domain / SQM Research

13. Be mindful of  the Brisbane property market oversupply

Brisbane property market oversupply

There has been a large increase in the number of off-the-plan units built in Brisbane over recent years.

With the supply of new and off the plan apartments in Brisbane’s CBD and inner ring outstripping demand, and estimates of another 15,000 apartments flooding the Brisbane market in the next year, there is little prospect of capital growth or rental growth in Brisbane’s apartment market in the near future.

There are about 19,800 apartments that are either under construction or being marketed within the inner-city precincts of Brisbane.

I can see the situation where some off the plan purchasers will have to wait up to a decade for capital and rental growth.

The good news is that new dwelling approvals are falling across Queensland

There were 2,840 dwellings approved for construction across the state in May 2018 which was -18.3% fewer over the month and a decline of – 24.6% year-on-year.

There were 1,971 houses and 869 units approved for construction over the month.

House approvals in May were 1.8% higher over the month but -16.1% lower year-on-year while unit approvals were -43.6% lower over the month and – 38.7% lower year-on-year.

dwelling approvals Queensland

Here’s a big mistake made by interstate property investors buying into Brisbane

Currently the Brisbane property market is being infiltrated by Sydney investors ‘buying blind’.

With Sydney property prices having risen strongly over the last few years and now that the market has slowed down from it’s frenetic pace, these high prices plus tighter banking regulations limiting investor’s budgets has caused many Sydneysiders to follow the sun north and look for property investment opportunities in Queensland but many are making a big mistake.

According to an article in Domain Sydney investors are increasingly buying properties in Brisbane solely on photographs and skipping inspections.

And they’re buying the wrong properties in the wrong location based on price.

Agents quoted in Domain say these southern investors are buying up in Brisbane suburbs considered “unfavourable” by locals and boosting house prices

One agent was quoted as saying:

“…blind-buying Sydney investors had flooded into the Logan market.

“Out of every 10 sales, five will be investors, and two will not have viewed the home, and that is a modest estimate.

“Often it seems as the investors have no idea about the area’s reputation.”

Domain quoted another agent as saying:

“We are seeing about 70 per cent of Sydney investors buying without seeing the homes,”

The lesson – don’t buy sight unseen:

It’s incredible what you can achieve, and the unsightly features you can avoid showcasing, when you’re using a good camera and exploit the right camera angles.

I’ve heard horror stories of people who have bought sight unseen thinking their investment property had an incredible view (it did – but only from the toilet) or who didn’t realise huge powerlines dominated the streetscape, because they relied on agent photos only.

The moral of the story is don’t risk purchasing site unseen unless you have a trusted representative review the property on your behalf.

How do I choose a strong investment property in Brisbane?

 

14. Buy a property for below its intrinsic value

Buy a property for below its intrinsic value

I’m a big believer in buying property for below its intrinsic value – that’s why I avoid new and off the plan properties, which generally attract a premium price tag.

Remember, though, that you’re not looking for a ”cheap” property (there will always be cheap properties around in secondary locations).

You’re looking for the right property at a good price.

Properties to consider may be ones that are a little ugly or untidy but have good “bones” and are in good or superior locations.

Some of Brisbane’s middle-ring suburbs may be worthwhile considering given they often have solid homes on land sizes ranging from 405 to 600 square metres.

15. Buy a property that outperforms the averages

Look for an area that has a long, proven history of strong capital growth and is one that is likely to continue to outperform the averages.

This is largely because of the demographics in the area.

These suburbs tend to be those where a large number of owner occupiers desire to live in the area, because of lifestyle choices of offer.

I look for suburbs where wages (and therefore disposable income) is increasing above average.

This translates to being an area where locals are able to and prepared to pay a premium price to live there, putting a financial floor under your investment property.

This is also considered to be gentrification.

So what we’re seeing is high-income people moving into particular locations, which perhaps used to be considered blue-collar, and spending their money there in new cafes and on renovating their homes.

In Brisbane, for example, there are a number of inner-city suburbs where there is occurring such as Annerley and Woolloongabba on the south side.

16. Buy a property with a twist

An investment must have something unique, or special, or different or scarce – some ‘X factor’ that makes it stand out from its neighbours – in order to land on my shortlist.

So when your looking at the Brisbane property market, consider properties that are “special” because of their design, e.g. perhaps Queenslanders or art deco apartments or properties in desirable locations.

Although you must keep in mind that sometimes these unique properties are more expensive to buy and to maintain, but history shows us they usually have stronger capital growth

Remember that more demand than supply always means higher prices.because of that scarcity factor.

17. Buy a property where you can manufacture capital growth

An ideal investment is one in which you can manufacture capital growth through refurbishment, renovations or redevelopment.

Buy a property where you can manufacture capital growth

For example, there are tens of thousands of properties out there that could all have their values increased through simple renovations.

While I don’t believe that investors should subscribe to the “buy, renovate, sell” philosophy, because the opportunity to profit is not great, what works really well, if done correctly, is a buy renovate and hold your investment property.

Here you buy a property with renovation potential, renovate and then keep it as a long-term investment having added value.

This added value will give you improved rentability – your property will be more attractive to a wide range of tenants – as well as achieving a higher rent and you will have “manufactured” some equity.

So what does all this mean?

To me, the picture is clear.

Brisbane’s property market is ripe for investment – it’s economy is improving, population is growing, infrastructure is being added and property remains affordable.

Your biggest challenge is to find the right property to buy, but that’s what the Brisbane team at Metropole specialise in.

Why not click here now and have a chat with us and discuss your options.

How can I stay on top of current information?

 

18. Get news, updates and advice by email

Are you interested in keeping up to date with the latest Brisbane property market news?

There is so much information available about various Housing Market Trends, strategies and market information that it can be overwhelming knowing where (or how) to get started.

Join the 105,000-plus Australians who subscribe to Michael Yardney’s Property Update or better still get a daily dose of insightful commentary in your inbox each morning.

Join here; this is free and different to our newsletter subscription.

19. Take advantage of investment advice

Whether you are new to property investing or a seasoned landlord with many years of experience in the trenches, the team at Metropole would love to help you formulate an investment strategy or review of your existing portfolio, with a shared goal of helping you acquire your next A-grade investment property.

We can help you take advantage of opportunities currently available in the property market, by offering independent, unbiased advice.

Contact us for a complimentary, obligation-free session with one of our property strategist’s today.

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Michael Yardney

About

Michael is a director of Metropole Property Strategists who help their clients grow, protect and pass on their wealth through independent, unbiased property advice and advocacy. He's once again been voted Australia's leading property investment adviser and his opinions are regularly featured in the media. Visit Metropole.com.au


'What’s ahead for Brisbane’s property market?' have 107 comments

    Avatar

    June 30, 2019 Miranda TP

    I have been advised to buy a townhouse completed 3 months ago in a boutique complex of 60 called Hive The Gap on the Illowra Street, The Gap. Would you consider it a good advice?

    Reply

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    June 11, 2019 Jane

    Wow, I wasn’t expecting that answer but will most definitely take your advice on not buying into an ex-hotel (no matter whether it’s a beautiful art deco building or not!) May I ask why I should avoid buying in the Brisbane CDB? – apart from the fact that everything closes so early 🙂

    Reply

      Michael Yardney

      June 11, 2019 Michael Yardney

      Jane – nothing to do with closing early – there has been a very poor history of capital growth for CBD apartments in Brisbane and what you’re describing – a small apartment is something the banks wouldn’t be keen to lend on as there is a very limited market for them

      Reply

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    June 10, 2019 Jane

    Hi, I live in NSW and have a home that I will rent out (rather than sell) to provide myself an income. I’m keen on relocating by myself to Brisbane in a couple of years so I’m researching the market as I’d love to live in an apartment in the Brisbane CBD for lifestyle reasons. I have found I’m drawn to art deco style buildings. I have found one I really like however Im not sure whether I’d be making the right decision or a big mistake. It is being offered at mid to high 200s. Ex hotel room. I’d really appreciate any advice you can provide as to whether I should take the leap and make an offer or to wait a bit longer. Thank you for providing your current report to Brisbane’s potential real estate market as it’s been very useful.

    Reply

      Michael Yardney

      June 10, 2019 Michael Yardney

      Jane- DON”T buy in the Brisbane CBD – esp an ex hotel room A TERRIBLE investment at any price – I’m so glad you asked

      Reply

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    June 8, 2019 Susan Law

    Hi Michael, I am looking to buy a family property in Scarborough Queensland and have broadened my search to Redcliffe, Woody Point, Margate and Clontarf. Which would be your suggestion for a better performing suburb. I am looking to buy a 4 bedroom duplex or townhouse at under $500k which is quite hard with the supply at 3 bedroom at most.

    Reply

      Michael Yardney

      June 8, 2019 Michael Yardney

      Susan I don’t like recommending suburbs, because there’s much more to it than that – the right property in a poorer performing suburb could easily outperform the wrong property in the wrong location in another suburb

      Reply

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    June 7, 2019 Sam Dabbit

    Hi Michael, what are your thoughts on Boondall..
    Looking at a House & Land package for $570K. New would help with depreciation but what are your thoughts on the area?

    Reply

      Michael Yardney

      June 7, 2019 Michael Yardney

      Sam – it’s no use having depreciation if you don’t have capital growth. STEER CLEAR of house and land packages – no spcarcity – wrong demographic area – you’re setting yourself up for failure

      Reply

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    June 3, 2019 Matt Gee

    Hi Michael,

    Some great advice here. I am fairly new to the Brisbane market and trying to sort fact from fiction. Reading your advice and the comments here I don’t know if I am any wiser. I am currently looking at 2 areas and new builds to maximise the depreciation. You advise against new builds – Why is this? Also, I am looking at Augustine Heights and Bahr’s Scrub – You advise against Ipswich so would I be better at looking at Bahr’s Scrub?
    Thanks

    Matt

    Reply

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    May 30, 2019 Goncalo Duarte

    Hi Michael,

    Thank you so much for sharing these very informative articles, I really enjoy reading them.

    My partner and I are looking at investing in property, we are first home buyers. We live on the Gold Coast but we believe Brisbane might be a better place to invest. We looked at an off the plan unit in Kangaroo Point, 2B, 1Bth, 1CP. We understand there is an oversupply of units in Brisbane, but we have also read from different sources that this seems to be coming to an end. We are also encouraged by the cross river rail which will have a station right next to the unit we are considering buying. Do you think this is a good first investment or do you think we will see no capital growth and consequently will be unable to further invest?
    We were also considering maybe a house land package in Pimpama or Coomera region. I personally prefer the Kangaroo Point unit. What are your thoughts?

    Thank you so much for sharing your knowledge!

    Regards,

    Goncalo

    Reply

      Michael Yardney

      May 30, 2019 Michael Yardney

      Goncalo – please avoid both off the plan and house and land packages – they have ALWAYS underperformed. What is your budget?

      Reply

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        May 31, 2019 Goncalo Duarte

        Hello Michael!

        Thank you so much for your reply! I was wanting to spend around the $500k mark.

        Reply

          Michael Yardney

          May 31, 2019 Michael Yardney

          That’s a great budget and you definitely can get an investment grade property – but where you’re looking is the wrong spot – why not get my team at Metropole in Brisbane to help you – we have no properties for sale so will give you independent advice- click here and leave your details

          Reply

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    May 27, 2019 1 bedroom apartments brisbane

    Once you have done your research, you should be able to make the correct decision about purchasing it as an investment. Investing is always a risk, so keep that in mind.

    Reply

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    May 6, 2019 John

    HI Michael, great commentary, couldn’t agree with you more. One comment to add – you mentioned the fact brisbane is large parts floodplain, but I think one thing Bris council has done well is leverage the creeks and drainage systems as public spaces – Enoggera, Bulimba, Downfall creeks and Kedron Brook as examples, provide fantastic green space, modern playgrounds, exercise areas and wildlife corridors. Proximity to such can be a real attraction for families and young couples. Do you think this kind of public amenity/lifestyle feature is worth considering in selecting areas/properties for capital growth or does it have more bearing on rental yields?

    Reply

      Michael Yardney

      May 6, 2019 Michael Yardney

      John, while I agree you should look for amenity, I would steer clear of flood prone areas – why ask for problems?

      Reply

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    April 29, 2019 Louise

    What are your thoughts on buying a property in Goonda for mid 200K, staying in the property for around 6 months while making some cosmetic improvements then renting the property out. Moving on to another and repeat.

    Reply

      Michael Yardney

      April 29, 2019 Michael Yardney

      Louise – this will not be an “investment grade property” – how will you get the deposit for the next one if you don’t get capital growth – the banks won’t lend against a renovation after 6 months

      Reply

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    April 16, 2019 Rowan

    Hi Michael,
    Can you please let me know your thought on Redland Bay? I have a house and I would like to sell it however seems like I will loose around $25,000 if I sell now. Do you think if I should sell it to buy in Sydney to upgrade my current place or Hold it if Redland Bay may do well in couple of years time?

    Reply

      Michael Yardney

      April 16, 2019 Michael Yardney

      Rowan – it would be wrong to give such specific advice in this sort of forum without knowing your strategy, your finance capacity, your risk profile, what other investments you have, your time frames etc, etc

      It’s much to big a decision to make – have you considered getting advice from the Metropole team

      Reply

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    April 15, 2019 Peter Ford

    Great information Michael

    Reply

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      April 16, 2019 Sonia Dobbs

      Hi Michael,

      Im considering buying a queenslander 2 bedroom property in Wynnum on Clara st approx 400mtrs from the bay opposite the medical precinct, it is rented with a view to extend for a longer lease. Do you think Wynnum in worth investing in if the property is rentable in good condition and is under $540,000. Sonia

      Reply

        Michael Yardney

        April 16, 2019 Michael Yardney

        Sonia – it would be wrong to give such specific advice in this sort of forum without knowing your strategy, your finance capacity, your risk profile, what other investments you have, your time frames etc, etc

        It’s much to big a decision to make – have you considered getting advice from the Metropole team in Brisbane

        Reply

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    April 2, 2019 Margaret

    Good afternoon Mr Yardney.
    I have an investment property in Wondall Gardens Estate in Tingalpa, Brisbane which I would like to keep for another three years and sell in July 2022 as I head into retirement. I have just had that property Bank valued and was very happy with the result. Is Tingalpa likely to keep on tract or increase in relation to property values as of today into the future 3 years ahead? I would really appreciate your opinion. Thank you and regards

    Reply

      Michael Yardney

      April 2, 2019 Michael Yardney

      Margaret – being 10km from the CBD it should perform quite well in the next few years.
      I see no reason to sell it earlier

      Reply

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    March 3, 2019 Sam

    Hi Michael,
    I’m from Victoria and looking to purchase an investment property within my SMSF up to $400K in Brisbane. I’m considering the suburb of Kangaroo Point due to its proximity to the CBD and other amenities, though I will be limited to a 2 bedroom unit or apartment in this location. Is this a suitable suburb for an investment of this type, considering I’m looking for capital growth and optimal occupancy.
    Your thoughts please…….thanks in advance.

    Reply

      Michael Yardney

      March 3, 2019 Michael Yardney

      Sam – if you’re buying your property in your SMSF this is a really important decision.
      I like kangaroo Point’s location just as you do, but there are very few investment grade properties on the market there at present – too much of an oversupply of “investment stock” which is very different.
      Why not get the Brisbane team at Metropole to suggest some locations – click here and leave your details and we’ll be in touch.

      Reply

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    March 2, 2019 Harrison

    What are your thoughts on the Petrie area with the new university to open there in 2020?

    Reply

      Michael Yardney

      March 2, 2019 Michael Yardney

      Harrison – locations around universities tend to be poor locations for investments. Students don’t buy properties – Capital growth occurs because of affluent local owner occupiers who can afford to buy properties thereby pushing up values.
      This demographic does not want to live near a university.
      There are much, much better locations in Brisbane

      Reply

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    February 26, 2019 Sam

    Hi Michael, I bought a 3bed house and land package in Dakabin 2 years back. It hasn’t seen any growth in this time. This is my first investment property and I must admit it wasn’t the best of decisions. I should have done more research and talked to experts such as you, but now after reading few of your articles I have learnt a bit about home investing, but I can’t change the past. I have thought about selling off my investment property but was also wondering if it would be a good idea to sell my primary place of residence which is in Sydney and move into the investment home.

    Reply

      Michael Yardney

      February 26, 2019 Michael Yardney

      Sam,Yes you have made a mistake – But join the club- We have all make mistakes, I know I have made what my share.
      So now is the time to correct your errors and move forward. As you say it’s a difficult decision and should be done with numbers and figures not emotion.
      That’s one of the reasons we build personalised Strategic Property Plans for a clients – to give them the numbers and figures so they can make factual base decisions and move in the right direction.
      Why not have a chat with our team at Metropole and organise the time to do the numbers on your own personal situation.
      You can find out more about the service by clicking here Just leave your detailsIt will be in contact

      Reply

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    February 25, 2019 Louis Billam

    Hi Michael, I am looking at purchasing an apartment in the Brisbane CBD to live in for around $350,000. I see there is little potential for capital growth in this area or the unit market. I would hope that the property would at least maintain it’s value as selling the property in around 5 years time would be part of my retirement plan. What are your thoughts/suggestions?

    Reply

      Michael Yardney

      February 26, 2019 Michael Yardney

      Louis – If I were you I’d rent a property in the Brisbane CBD and use my money elsewhere to work hard for me – let the poor landlord make a loss. Why should you?
      If you only tread water, you’ve still made a loss – the opportunity cost

      Reply

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        February 26, 2019 Louis Billam

        Thank you for your feedback Michael, it is much appreciated

        Reply

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    February 25, 2019 Tony

    Hi Michael,

    Thanks for your insight. We are looking for a investment property in the southside & northside and we have been looking for a few low set home in Underwood and Albany Creek with a budget of $600k as the houses are generally newer, will i be better off getting a property closer to the city even though they are much older (i.e. Mount Gravatt or Chermside built in the 60s)? And what are your thoughts on buying a property near creeks? There’s one property we really keen on but they are right on the edge of the flood plan when i checked from the council website. Thanks!

    Reply

      Michael Yardney

      February 25, 2019 Michael Yardney

      Tony, you have a good budget to buy an excellent investment grade property in Brisbane. Please don’t waste it.
      In my mind, capital growth is critical and it is interesting that in the last few years when capital growth has, in general, being poor in Brisbane some suburbs have outperformed and certain properties in these suburbs have done even better.

      Over the weekend I was preparing my presentation for my upcoming workshop in Brisbane and was given some case studies by the Metropole Brisbane team of properties that have achieved 15 and 20% capital growth over the last couple of years, while the general market has languished. Isn’t this the type of result you want? Why not have a chat with my business partner in Brisbane, Brett Warren – find out more about him here at Metropole Brisbane

      Reply

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    February 24, 2019 Brett Heffernan

    What are your thoughts on investing west of Brisbane? ie Ipswich, Toowoomba.

    Also, thoughts on purchasing Defence Housing properties mid lease?

    Reply

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    February 23, 2019 Jillian

    Hi Michael
    I am planning on buying a new apartment in Nundah as a first home owner, then potentially using the apartment as an investment property after a couple of years (my partner is currently interstate and we look to buy a seperate home together in a couple of years). What are your thoughts on investing in an apartment in Nundah as an investment?

    Reply

      Michael Yardney

      February 23, 2019 Michael Yardney

      Jillian – I understand why you may want to take advantage of the First Home Owner’s grant and Nundah is not a bad location. Butin general, new apartments are going to underperform because of the vast amount of oversupply in the surrounding suburbs. You don’t really want to sit on a property that has minimal growth for a decade do you.
      To give you a better answer I’d need to know your budget, your risk profile, your time frames, your property strategy etc. – why not have a chat with Brett Warren, my business partner in Brisbane – http://www.BrisbaneBuyersAgent.com.au – he has no properties for sale so will give you independent advice

      Reply

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    February 18, 2019 Sarah

    Hi Micheal
    Thank you for this thought provoking article. My husband and I currently rent in a luxury apartment block in the Valley and we are looking at buying an apartment within walking distance of the city (ie the Valley or Spring Hill). A financial adviser suggested that we should instead buy a home in Holland Park and rent it out and continue to rent our apartment in the Valley as the rent is low and it suits our lifestyle.
    What are your thoughts?

    Reply

      Michael Yardney

      February 19, 2019 Michael Yardney

      I don’t know your circumstances, but it sounds like your advisor is right – you won’t get growth in the Valley for years while houses in certain areas will grow substantially. I’m not sure why he would suggest Holland Park – there are many suburbs with superior capital growth – remember financial planners should be good with numbers – not real estate – it’s not their specialty – Why not ask my buiness partner Brett Warren at Metropole in Brisbane – he’ll set you straight – organise a chat here

      Reply

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        March 25, 2019 Sarah

        Thank you Michael, I appreciate your advice.

        Reply

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    January 30, 2019 Leisa

    Hi Michael,
    I’m finding your articles and posts really helpful. Thank you. I’d like to ask you a question about my 2 bedroom unit in Auchenflower. It s in a 1966 building with high ceilings and generously sized rooms. I have happily lived here for the past 20 years and have enjoyed lovely city views from the balcony and main bedroom. My new neighbours have plans to raise their traditional house (with preserved character overlay). This will completely block my city views. Real Estate agents have said that this will significantly impact my resale price in the future . I had been planning on holding on to my unit for another 10-15 years but had not foreseen this current dilemma. Would I be best to attempt to sell up now before my neighbours proceed further with their plans in order to take advantage of the city view factor?

    Reply

      Michael Yardney

      January 31, 2019 Michael Yardney

      Leisa – this may block your city views and while that will impact the value of your property – but I can’t tell you how much nor what the effect will be in 10-15 years – your time frame.
      What’s the alternative – if you sell now what can you afford to buy and what certainty will you have – there’s clearly no simple answer – sorry

      Reply

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    January 29, 2019 Zack

    Hi Michael,
    I am considering purchasing an investment property in Goodna. I understand that in the short-term, capital growth may be limited for this area, but I am looking for a positively-geared property around the $250k mark. Some I have viewed are returning >7% rental yield and with large land areas (>800sqm). Eventually, perhaps over the next 10-15 years capital growth should come into this area, but in the meantime buying a strong positively-geared property reduces any holding costs and allows me to build a portfolio without the capital growth. The capital growth could then be considered a bonus. What are your thoughts?

    Reply

      Michael Yardney

      January 30, 2019 Michael Yardney

      Zack – the problem with your proposed strategy is that you will never be able to build a portfolio without capital growth – you’ll never get the deposit for your next property – if you don’t have enough money to buy an investment grade property then the right thing to do is NOTHING!
      Wait until you’ve got enough to buy an investment grade property otherwise you’ll get the same result most investors get – and that’s not good

      Reply

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    January 15, 2019 Chris

    I am new to your reports Michael. I own a 1 bedroom apartment in WESTMARK MILTON for 2 years. I can’t see any capital growth in the near future and rental income is another problem. we pay additional $10000 out of pocket every year. Can you give me some suggestion?

    Reply

      Michael Yardney

      January 15, 2019 Michael Yardney

      Chris – unfortunately the oversupply of apartments in and around Brisbane’s CBD has held back capital growth – in fact prices have fallen as have rentals and it is unlikely this will change in the next few years, even though the undersupply of apartments is dwindling.
      I can’t advise you what to do as it will depend on your long term goals, how much you’ll lose by selling the apartment and if you can obtain finance again for an alternative investment – it’s a big decision- but the team at Metropole can assist by running the numbers for you – we do this when we build you a Strategic Property Plan why not get us to help you?

      Reply

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    January 10, 2019 Roy Flynn

    Hi Michael, we are retired and living on acreage but are looking to move closer into Brisbane. We like Petrie and surrounding Northern suburbs area (but not North Lakes, where in common with many new “suburbs”, the boring houses are squashed into a skinny frontage with no parking and no outdoor space). Comments on these areas please?
    We want a ~20-30yo house suitable for dual living so we have a carer to assist us in our later years, so the soon to come Uni campus in Petrie seems a good idea to us.

    Reply

      Michael Yardney

      January 11, 2019 Michael Yardney

      Roy – as you are retired there are many considerations to take into account and if this is going to be your “final” home factors such as investment grade and capital growth are not likely to be as important to you as affordability and amenity for the sort of life you want to live. Based on this I can’t give you a generic answer – these factors are personal. Why not chat with Brett Warren, my business partner at Metropole in Brisbane – organise a time by clicking this link. This is a very important decision- you can’t afford to get it wrong.

      Reply

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    January 7, 2019 Cynthia Bailey

    Hello Michael,
    I have a 2 B/R unit in Redcliffe which I have held since 2010 (bought new). I paid 450K & is now worth between 350-400K. I retired last year & cant afford to keep it as it costs me 10K/year out of pocket expenses. Is there anything happening in that area to increase its value. I thought when the rail went through that would have helped but it hasn’t. I live in NSW.

    Reply

      Michael Yardney

      January 7, 2019 Michael Yardney

      Cynthia
      Sorry to hear of your dilemma – it’s one of the problems with buying new and then buying in the wrong area.
      It really depends on where your unit is located but there are few growth drivers for units in Redcliffe as opposed to houses.
      You’ll have to make your decision carefully because now that you have retired you may not be able to get finance again. Seek professional advice

      Reply

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    December 31, 2018 Tammy

    Hi Michael, I am new to your forum. It’s very interesting to read about your professional advice. We bought a 1 bedroom unit in the Brisbane CBD in Nov16, but the unit price in Brisbane seems to go downward. We are thinking to sell this unit and reinvest in Sydney instead. We would love to hear your thoughts about this please. Thank you

    Reply

      Michael Yardney

      January 1, 2019 Michael Yardney

      Tammy – sorry to hear about your problem – unfortunately 1 bedroom apartments in the CBD are not what I call “investment grade” – they are investment stock – built for investors and they will keep falling in value for some time. Many won’t see much appreciation for a decade.
      But there are some important numbers to run before you make any decision. Let the Brisbane team at Metropole help you. By the way it won’t be easy to sell your apartment – anyway click here and organise a time for a chat

      Reply

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    December 21, 2018 Ross

    Hi Michael,
    I’m just curious to know your thoughts about the the greater Brisbane area. What are the prospects for capital growth there. There are several infrastructure projects occurring, a high level of housing affordability and decent employment opportunities. In particular, we are looking at the Logan area in the expanding suburb housing estate suburb of Holmview (Next to M5 about 30mins drive from Brisbane city). Whilst this area has had a bad reputation as your article mentions, it seems poised to grow in the similar way that house prices climbed in South-West Sydney – Bankstown, Riverwood, Padstow etc…

    Reply

      Michael Yardney

      December 21, 2018 Michael Yardney

      Ross – please avoid the Logan area – it’s too far out of Brisbane to benefit from medium term growth plus it has the wrong demographics.
      There’s a well know “expert” who’s been pushing Logan for almost 10 years and everyone who’s bought there has missed out.
      There are many better options

      Reply

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    November 27, 2018 Parco

    Hi Michael,
    Thanks for all your information on property investment – makes perfect sense and have been learning heaps.
    My partner and I are looking at expanding our property portfolio. Currently we have 2 investment property and we are rentvesting. Our situation got a little bit complicated and thus we decided to look for professional help – i.e. qualified property investment adviser. After discussion with him, he suggested us to purchase our 3rd investment property within 25km of Brisbane CBD, focusing on capital growth potential and owner occupier appeal. So far so good. However, the type of property he has advised us to go for a house and land package.
    We understand that buying new, i.e. house and land packages, off-the-plan townhouse/apartments/units generally means paying a premium to the developer. We are perplexed as to what we should believe in. Given this idea was coming from a qualified adviser, we should feel confident about it, yet it contradicts what we have learnt so far.
    What is your thoughts on this? Can a house & land package be a good investment option? We appreciate your feedback.
    Kind regards,
    Parco

    Reply

      Michael Yardney

      November 27, 2018 Michael Yardney

      Run away very, very quickly – are they really “advisers”? I doubt it – many sales people disguise themselves as advisers.

      That’s much too far from the Brisbane CBD and there is NO scarcity in those areas – if you’re looking for a professional adviser why not work with my team at Metropole in Brisbane – we’ve got no properties for sale – just click here and organise a time for a chat

      Reply

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    November 26, 2018 Greg

    Hi Michael. I have an investment apartment in Paddington. Rent has been lower than expected and not seeing any capital growth. When would you expect the situation to improve? And should I hang onto it?

    Reply

      Michael Yardney

      November 26, 2018 Michael Yardney

      Great question Greg. Paddington is a great area but I’m sure you realise Brisbane apartments have been in oversupply for a few years now, and while this is now levelling out, we expect poor growth in apartments for the next few years yet, even though house prices should rise.
      As to whether you should sell there are so many variables involved – esp can you get finance to buy something else – so I can’t answer that.
      However we help clients of Metropole by running the numbers for various scenarios when we build a Strategic Property Plan for them. we can do this for you – just click here

      Reply

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    November 24, 2018 Bridgette

    Micheal I enjoy reading all your articles thank you. My problem is my budget to invest doesn’t come close to the prices in the areas you recommend. Is there a way to grow my investment portfolio with about $350,000 to invest I was thinking I could buy renovate and sell units on the Gold Coast to increase my investment dollars or do I just wait. What do you think?

    Reply

      Michael Yardney

      November 24, 2018 Michael Yardney

      Bridgette – I understand your problem, you’re not the only one who has difficulty getting the budget for “investment grade properties.”
      In my mind if you can’t afford a property around $450,000+ then you should wait until you can.
      I know some would disagree, but when you see the results of most investors who never get past their first property, you don’t want to be one of them – do you?
      And you can’t make money flipping properties after reno – again despite what some will tell you – please read this blog.
      WEALTH IS THE TRANSFER OF MONEY FORM THE IMPATIENT TO THE PATIENT

      Reply

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    November 19, 2018 Marta

    Hi Michael, what do you think of the Manly suburb in Brisbane? We saw a great block of land, reasonably close to the water, where we could build a house (for investment). Is this an investment grade suburb? It seems like a very family-oriented suburb. And is it a good deal to build, provided the total cost (build + land) is below the suburb median price?

    Reply

      Michael Yardney

      November 19, 2018 Michael Yardney

      Marta
      I don’t know your budget or your strategy, but Manly is NOT on our radar for Brisbane.
      Sure it’s quaint, but it’s too far away from the CBD and there are many Brisbane locations which will outperform.
      And DON”T buy /build below median price – that’s a very, very poor investment strategy. Invest int he type of property affluent local owner occupiers want – not those constrained by their budget.
      I know that’s not what others teach – but you don’t want the results others get – do you?

      Reply

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    November 6, 2018 Deekay

    Hi Michael,
    We are a family of 4 (2 young ones). We currently rent in Nundah and planning to buy our first homey (maybe a house up to 650-700 K) in Nundah area. What is your outlook about the area. Family security, education and ease of transportation is a priority for us.

    I appreciate your response.

    Reply

      Michael Yardney

      November 6, 2018 Michael Yardney

      Deekay
      Good question, because even though you’re buying a home, it’s great for it to have good investment prospects.
      However I really don’t like answering this type of question because even though Nundah is a good suburb with growth prospects, there are different precincts in this suburb (like in every suburb) and some will perform much better than others.
      You’ve got a great budget – but in today’s market it is critical to buy the right asset at the right price.
      Our Brisbane team at Metropole specialise in helping home buyers – why not click here and contact us – we’ll give you more details about where and what to buy

      Reply

    Avatar

    November 2, 2018 Irene

    Good afternoon,
    We are a couple in our 30’s looking to buy a 1st investment property in south east QLD (however, not to live in, we’ll keep renting). We have been approached by a company named VYSTAL which offers us a package of Finance advice + mortgage advice+ land&house construction &offer rental services.
    It all sounds good… But we are looking for additional advices. We don’t mind paying for the services offered by this company, but…. Are those services usually decent & worth it? Or is it a complete scam?
    I am unsure yet as to the location of the future house, but the advisor we saw did mention North Lakes.
    Any quick word or this particular company or this type of services?
    Many thanks !
    Irene

    Reply

      Michael Yardney

      November 2, 2018 Michael Yardney

      Irene – we won’t talk about specific companies int he is forum, instead please read this blog on how to chose a property adviser https://propertyupdate.com.au/how-to-choose-a-property-advisor/.
      Then run away as fast as you can form anyone offering you a house and land package – they make TERRIBLE investments – just look at the track record.
      marketing companies are paid by the developers – if they pay their fee – you are the product!!
      If you’re looking for independent advice from a company with a long track record and who doesn’t sell property, please have a chat with my team at Metropole in Brisbane

      Reply

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    October 27, 2018 Ian

    Hi Micheal
    I am considering buying 2572sqm reasonable flat acreage land in the River Oaks estate in Logan village for $370,000 and building a 450 sqm $600,000 home and pool on it. Do you consider this a good investment?
    Regards
    Ian

    Reply

      Michael Yardney

      October 27, 2018 Michael Yardney

      NO!!! Ian there are some commentators who’ve been pushing Logan for years – but it has always underperformed and will continue to do so because of the socio economics of the area – plus the type of property you’re proposing does not fit ANY of my criteria for an investment grade property. That budget would get you a great investment in the inner ring of Brisbane

      Reply

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    October 23, 2018 David

    Hi Michael, I own a older block of flats on Milton Road, Milton , we have had them for over 20 years. For personal reasons we’re considering selling them. We’re not in rush, do you think this is a good time to get out? Our return has dropped in the past few years by about 10%, I think due to all the new units. I also own 3 properties in Petrie Terrace, what is your view of Petrie Terrace as a long term investment area?

    Reply

      Michael Yardney

      October 23, 2018 Michael Yardney

      David
      It would be wrong for me to answer this without knowing a lot more. I don’t know your age, your financial position and more importantly what you would or could do with the funds if you freed them up. I’m sure despite the good location your properties have underperformed in the last few years
      Considering the size of your investment you really need to have the numbers and a number of scenarios run – by the way…that what we specialise in when we build a personalised Strategic Property Plan for our clients. Click here and read about it and organise a time for a chat.
      There is too much money at stake to give you a glib answer in this forum

      Reply

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    October 23, 2018 Roy

    Hi I have a high quality boutique unit in Toowong with a great long term tenant. Problem is value has been flat lining for many years now. Should I cut my losses and sell up or will Toowong improve in the near future given the huge projects going on in and around Brisbane.

    Reply

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    October 21, 2018 Sharad

    Hi Michael
    What a insightful article,very informative and useful.
    We are young family of three ,the new addition to the family is 6 months old .
    We have been looking to buy our first home for a while now,looked at old houses to renovate and also renovated post war homes but have finally decided the buy a new house on of many estates on the south side of Brisbane.

    1) we decide to go with Rochedale due to its proximity toM3,M1,and the gateway motorway,good schools and availability of new land in secure estates .
    2)Our budget is 750k and we are looking for capital growth in the long term to give equity for our next property .
    3) the reason why we choose a new land and house is because we are migrants and therefore don’t have many local Contacts (tradies) etc and also are looking for a secure neighbourhood with similar demographics .
    4) Could you please advise if Rochedale is a good option to buy a new house and land keeping in mind the current downturn of prices and news about property market going down by 40% in Sydney and Melbourne.I have been told that Brisbane always follows.

    Reply

      Michael Yardney

      October 21, 2018 Michael Yardney

      Sharad
      Where you buy a home for your family depends a lot on your personal needs, but if you’re asking will Rochedale be a top performing suburb in the long term – the answer is simple – NO!

      Reply

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    September 24, 2018 Greg

    Hi Michael,
    I have a unit in the south western area of West End in Brisbane. I’ve owned it for approximately seven years. It’s in a block of 10. I used metropole to purchase.
    With all this oversupply of units I’m hearing about, should I cut my losses now instead of waiting another 10 or so years before seeing a profit?

    Reply

      Michael Yardney

      September 24, 2018 Michael Yardney

      Greg
      Westend is a great location and an apartment in a boutique block will be in more demand (its more scarce) than the highrise monoliths.
      I’ll get Brett from our Brisbane office to give you a call we can answer your question in person

      Reply

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    September 21, 2018 Mark

    Hi Michael,

    My poor choice of a Buyers agent, led me to purchase a 3 br 1 bth house on 900 sm land in Beenleigh. The property has been tenanted throughout and the property price has increased marginally. Should I hold the property and keep the minimal gains that I make from it (foregoing opportunity cost), or sell and reinvest closer in to Brisbane? My wife and I do hope to retire in 2 years time, but will have roughly $100k in Superannuation income. (i.e borrow now while working?)

    Reply

      Michael Yardney

      September 21, 2018 Michael Yardney

      Mark – buyers agents are not he right people to formulate a property strategy – they should just implement the strategy of a good advisor – I discuss this here https://propertyupdate.com.au/how-to-choose-a-property-advisor/
      Your tight time frame makes things very difficult, and since I don’t know your circumstances it would be wrong to say whether to buy or hold.
      But it is a critical decision – one that has to be decided on numbers not gut feel. I really recommend you take the time to allow us to crunch the numbers by preparing a strategic property plan for you.
      It really sounds like you should click on this link to find out what it’s all about and let us help you

      Reply

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    August 27, 2018 Megan

    Hi Michael

    Just on apartments, I have a unit in Bulimba and it is one of the best older units you can find in the suburb. The past quarter they have dropped value by 2% and I’m super keen to have my home revalued to draw on equity. Doing so now will not do me any favours, so how do I know how long to wait before the prices come back up? Bulimba seems to be booming as of late but why aren’t the units doing so? The houses are for sure!

    Reply

      Michael Yardney

      August 27, 2018 Michael Yardney

      Megan As I often say – location does 80% of the heavy lifting, but that’s not enough – you need to own the right property in that right location and the huge oversupply overhanging the inner suburbs of Brisbane will hold back the growth of your apartment – and this is likely for some time to come. No major increase in value on the horizon – sorry

      Reply

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    August 21, 2018 saritha

    Hi,

    am looking to invest in a property on Rode Rd in Waverly hills suburb ??…would love to hear your thoughts on this suburb

    Reply

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      August 22, 2018 saritha

      Sorry its Wavell Heights

      Reply

        Michael Yardney

        August 22, 2018 Michael Yardney

        The problem with me giving thoughts on a suburb is that most properties in that suburb are not investment grade
        We would definitely NOT buy on a main road, or a secondary main Road like you’re suggesting
        Of the thousands of properties on the market in Brisbane – how did you choose this one?
        What is your budget?

        Reply

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    July 19, 2018 Maxwell

    Hi Michael,

    I am considering investing in off the plan 4B/R Boutique townhouse in Everton Park. Do you reckon it has a potential in terms of ROI and Capital growth long term.

    Reply

      Michael Yardney

      July 19, 2018 Michael Yardney

      Maxwell – I don’t know your situation or the complex you’re talking about – but as virtually no other purchaser of off the plan properties in Brisbane has made made over the last decade – in fact they’ve lost money – I would steer clear – there are too many extra costs and fingers in the pie with off the plan properties

      Reply

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    April 5, 2017 rishi

    Hi Michael,

    How about buying an apartment in Brisbane CBD on Coronation Drive? The place is 10 mins walk to Roma St. Train/Bus Station.

    Reply

      Michael Yardney

      April 5, 2017 Michael Yardney

      Rishi. It’s a convenient location, but not an investment grade location.

      With a huge oversupply looming prices and rents will fall and will remain subdued for up to a decade

      Reply

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    January 29, 2017 Ange

    Redcliffe and surrounding suburbs???
    I know they very greatly, and that in the past, Moreton Bay Area has not performed particularly well, but I am wondering if the rail upgrade and Northlakes shopping centre will impact dramatically on the area’s capital growth. I am impressed with the road infrastructure taking place as well as the ‘feel’ the place is giving as it appears to becoming a little more trendy. Houses are still quite affordable there, is it a good area to invest in?

    Reply

      Michael Yardney

      January 29, 2017 Michael Yardney

      Ange
      I know the areas you mention well.
      Just visited a friend there a few weeks ago. While they may be a nice place to live, they’re NOT on my investment radar. There are many better areas in Brisbane

      Reply

        Avatar

        March 15, 2017 Adam

        Redcliffe is tipped go boom by many professionals, why would you say not to invest there? There are many good reasons to invest around the Redcliffe and north lakes area, from Costco to the new rail link, close to Brisbane, airport and the water it’s definitely a hot tip to invest here if possible by many a professional.

        Reply

          Michael Yardney

          March 16, 2017 Michael Yardney

          Adam
          Physical growth and population growth does not necessarily lead to capital growth.
          The article you refer to was written over a year ago and my thoughts have been proven to be correct.

          Reply

    Avatar

    January 22, 2017 MRS DEE

    I’m interested in what you think about the Brighton / Sandgate 4017 area as being a investment grade location ?

    Reply

      Michael Yardney

      January 22, 2017 Michael Yardney

      Mrs Dee
      There are some good pockets in the suburbs you mention, but you’ll then have to find the right pockets, the right streets, the right property and then buy it for the right price.
      That’s why I’m always loath to name specific suburbs on this site, because it still requires considerable research.
      Of course it also depends on your budget.
      Houses in this region have shown strong capital growth lately, but apartments have performed poorly

      Reply

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    January 5, 2017 Peter

    Hey Michael
    What do you think of Bribie Island as an investment

    Reply

      Michael Yardney

      January 6, 2017 Michael Yardney

      Peter. While it may be a lovely place for vacation this is NOT an investment grade location. Please steer clear of it. Check out the very limited market plus the terrible history of capital growth

      Reply

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    November 2, 2016 Lawrence Du

    Hi Michael

    Given the oversupply of apartments situation in inner Brisbane suburbs unfolding in this and next year, would you think the prices of those apartments will fall therefore wait to buy in two years?

    Regards

    Lawrence

    Reply

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    October 11, 2016 Meime

    i Michael,

    Which is the right suburb to buy for an investment property in Brisbane? Need your suggestions. We are looking a house to invest.

    Reply

      Michael Yardney

      October 11, 2016 Michael Yardney

      Meime – there is no “right suburb” and even in “investment grade” suburbs many houses won’t make good investments.
      I can’t answer without knowing your budget, your aims (cpaital growth or cash flow) your money situation (do you have surplus cash flow each month) your risk tolerance etc, etc.
      If you’re unsure which way to turn, why not have a chat with one of the property strategists at Metropole in Brisbane

      Reply

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    August 30, 2016 pitt

    I really like your article!!! CanI share it?

    Reply

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    July 19, 2016 kevin lamb

    I am new to your reports Michael. I own a property on the Gold Coast and would like to see some comment on that area. i see you avoid Gold Coast and the like, can you comment on that for those like me that dont know why?

    Regards

    Kevin Lamb

    Reply

      Michael Yardney

      July 19, 2016 Michael Yardney

      Kevin
      Welcome to my commentary.
      I love the Gold Coast and have vacationed there once or twice a year for over 40 years, have watched it grow and closely followed the local market.
      It is not an investment grade area – too volatile – so you won’t find me recommending it here, but it will be mentioned in various commentaries

      Reply


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