3.   Brisbane’s Rental Yields

As per the SQM data, the rental yield in Queensland is slowly looking up, and that’s good news for property investors. The gross rental yield for Brisbane houses was around 4% and for units closer to 5% last year.

4.   Brisbane Capital Growth

For the moment, Brisbane properties are more affordable than those in other two east coast capitals. However, according to CoreLogic forecasts, within two years Brisbane will see one of 10 houses sold fetching over $1 million.

The growth rate for the Brisbane property market is likely to be in the range of 3% to 5% this year. In a 3-year forecast to 2021, BIS Oxford suggests that the Brisbane property market will see the strongest growth across all property markets in the country over the next three years, likely to record a 13% jump in median prices to $620,000.

With its far lower median house prices compared to Sydney and Melbourne and higher rental yields, Brisbane has become an attractive market for interstate property investors.

The lifestyle advantages and local affordability factors have been responsible for driving a strong interstate migration, which grew 50.5% over the previous year. Queensland accounts for 12.7% of the overseas migrants and the interest of foreign investors in the Brisbane property market is growing significantly.

Properties in the city’s suburbs that fall in the inner and middle rings offer the most exciting capital growth opportunities in the long term.

5.   Brisbane’s Demographics

The population of Greater Brisbane which includes Brisbane, Ipswich, Logan, Redcliffe and Moreton Bay is 2.2 million, which is less than half the population of Sydney or Melbourne.

The population of Queensland is expected to cross seven million while the population of

Australia is likely to double by 2055.

The region is famous for its sub-tropical climate, laidback lifestyle, and great weather.

6.   Brisbane’s Infrastructure

According to the FY19 Budget, the economic growth rate in Queensland is projected to be 3% in the Financial Year 2019, compared to 2.5% the previous year.

There are many big-ticket projects currently going on around Brisbane, which have started creating jobs besides giving the economy some momentum.

One of such projects is the second runway coming up at Brisbane Airport at a cost of $1.3billion. The project, which is scheduled to be completed by 2020, has already created employment for hundreds of people. By 2035, it is going to create 8,000 new jobs and contribute $5billion to the Brisbane economy.

This airport expansion project will put Brisbane at the center of aviation activities. Its capacity to handle flight movements per hour would increase dramatically. It can become a new gateway for other parts of the country, especially for traffic from Asia. Targeting at opportunities stemming from the Asian Century, there are projects worth $30 billion scattered all around Queensland’s coastline.

7.   Brisbane’s Economy

Many local experts believe that the Brisbane property prices would not grow anywhere near Sydney or Melbourne unless there is a strong local economy. Brisbane is Queensland’s economic engine and with a strong history of infrastructure investment and economic performance.

According to available data, Greater Brisbane’s economy expanded rapidly to $135 billion, which is 47.1% of Queensland’s total economic output in 2012-13.

8.   Brisbane’s Population Growth

According to a report, the population of Greater Brisbane is likely to register a strong growth for the next 10 years during which an average of 62,410 new people will make Greater Brisbane their home.

In 2018, the population growth rate was projected to be 2.3%, which is expected to drop to 2.1% in 2026 and remain steady.

As the new population moves into the city, it will drive up demand for residential properties. Family households, as well as lone person households, are likely to witness the largest

increase in demand. Their average annual increase is likely to be 1.8% and 2.5% respectively.

Group households will see the weakest growth rate among all categories of residential properties at 1.4% per year.

9.   Brisbane’s Culture

Brisbane has a sub-tropical climate and is famous for its outdoor lifestyle. Its popular culture is characterized by the amazing range of dining options in residential and restaurant zones along the Brisbane River. Brisbane also has a vibrant calendar of cultural events and festivals. The city boasts comprehensive infrastructure for art and culture related events and functions. Exclusive exhibitions, inspiring theatre, local performances, outdoor cinema, street art, art galleries and performance spaces around the city.

Where Should You Start Looking?
 

Like anywhere else in Australia, the property market in Brisbane will be guided by demographics. People’s preferences about the location and the price that they want to pay can determine which property market is going to gain traction.

That’s why it is sometimes better to invest in areas where the local income level is higher than the average national income.

In these locations, the local population will have a higher disposable income and they will pay a premium more readily to live in these locations.

Many of such locations are in the inner and middle ring suburbs and they offer great investment opportunities in houses and townhouses.

These suburbs have been outperforming for a longer time and they are likely to at least perform well, while if things are really favorable, they can be star performers as well.

Consider School Zones

It is true that property prices are influenced by the proximity to education catchment zones. In general, these areas have outperformed the market and are expected to continue with their good performance.

Education is a long-term commitment whether you have children already enrolled at the school or you are looking for a school for your children. From the investors’ point of view, the investment made in school catchment zones increases the possibility of finding long-term quality tenants.

10.  Inner & Middle Ring Suburbs

Over the long term, suburbs closer to the city center tend to do better than all others.

In general, properties in the vicinity of CBD and the river seem to increase their value faster than those far away from them.

One of the defining changes that have taken place in Australian cities in the last 50 years is gentrification. It has sharply increased the value of suburban properties in the inner- and middle rings.

The gentrification has not been part of any government planning but has resulted from the evolving demographics.

The inner suburb saw gentrification with the exodus of industries, migrants, and workers. Initially, house rent and prices were cheaper here than many other suburbs.

11.   Suburbs on Your Radar

Of course, leading economists are claiming that Brisbane is going to lead the nation in capital growth on properties. However, it is recommended that you do your research well.

Various research agencies predict an 11% to 13% growth for Brisbane until 2021.  This is clear from these predictions that the Brisbane property market is going to experience a phase of high growth in the short term while the rest of the nation is witnessing a slowdown.

Brisbane houses have averaged 5% annual growth in the last five years whereas some of the suburbs have outperformed and are expected to continue with their above average performance.

Click here to read Part One of How the Brisbane property market is looking in 2019

Click here to read Part Three of How the Brisbane property market is looking in 2019