Following on from last fortnights blog, in this blog we will be going through our picks for Brisbane – one of the two locations we will be recommending to our clients in 2018. The Brisbane property market is complex at the moment with apartments preforming well below expectation and landed property (houses and town houses) performing much better.
One of the main reasons we like Brisbane is because of its affordability. Housing prices in Brisbane are approximately 40% lower than Melbourne’s and half of those in Sydney. With a beautiful climate and great connectivity to South East Asia it is no surprise Brisbane has seen high population growth in recent years. Most interestingly, employment growth in Brisbane has increased significantly, outperforming Melbourne and Sydney in 2017. This is a big turnaround, in the previous 5 years Melbourne and Sydney had accounted for over 75% of employment growth in Australia to just 11% in Brisbane (the third best performer).
There are risks though. A highly oversupplied inner-city apartment market and nervous lending environment means it’s more important than ever to educate yourself on the market and buy the right type of property in the right location. Nyko’s recommended projects this year will be focused on landed property – that is house and land packages and larger town houses built to owner occupier grade standards.
Brisbane is experiencing a similar phenomenon to what Melbourne experience in the last 5 years and Sydney before that. That is a flight to quality dwellings built to the standard an owner occupier buyer would appreciate and not a cheaper investment grade finish providing smaller dwellings and lower quality finishes. This flight to quality means that we not only have to pick the best project in the best location but more importantly the right builder and developer.
For town houses, middle ring infill suburbs will be our main focus. Larger internal areas in locations where housing stock is becoming unaffordable for the demographic will see a great market for town houses. There will however be a huge discrepancy in performance between high spec owner occupier grade town houses compared to the investment grade (cheaper finishes) property. Our focus will be on high quality projects built by great developers who are known to build for owner occupiers in the local market – this will help to underpin valuations and growth.
For house and land we will be focusing on high growth locations within 25km’s of the CBD as well as high quality inner city infill locations that we know have performed extremely well in the more established Sydney and Melbourne markets. While prices will be higher for these types of homes, we have seen that quality housing in sought after locations will perform well in the medium term.
At Nyko we believe this will be Brisbane’s year and if you take the time to do the research and get the right advice, picking the right property in this market will means it will likely perform as well as the Melbourne marketplace and certainly better than the Sydney market.