Following the recent release of our annual McGrath Report, this week I’m going to focus on what’s happening in what I believe will be the next Australian capital city market to boom – Brisbane.
All eyes have been on Sydney & Melbourne in recent years but history tells us that when the southern capitals boom, Brisbane & South-East Queensland inevitably follow as southerners migrate north looking for better value for money and the attractive lifestyle benefits of the Sunshine State.
Upgraders are driving most markets in Queensland but there is increasing interest from Melbourne & Sydney investors chasing better yields & value too. Over the next three years, I believe Brisbane & South-East Queensland will deliver the best capital growth of all the major cities & presents a fantastic opportunity for southern investors, downsizers & seachanging families.
Rewind five years and the median house price in Brisbane wasn’t that different to Sydney & Melbourne. RP Data shows the price gap was just $25,000 with Melbourne & $134,000 with Sydney. Today, that gap has widened significantly to $115,000 & $270,000 & it’s this sort of gap that has sparked Brisbane’s previous growth cycles. That’s what we’re starting to see now.
At the start of any growth period in any location, you see a few tell-tale signs:
- More local & out-of area investors
- More families upgrading while value remains
- First home buyers looking to get out of the rental cycle
- Returning developers
- The number of sales goes up
- The days on market goes down
- More buyers attend opens & register to bid at auctions
All of this is happening in Brisbane right now & it’s finally starting to have an impact.
RP Data reports Brisbane property values are up almost 7% in the 12 months to August 1 (which looks slow compared to Sydney’s 14.8% & Melbourne’s 11%) but as growth in Sydney & Melbourne slows down, Brisbane’s is likely to ramp up.
Last year, Brisbane’s sub-$1M bracket was the standout sector, this year it has extended to sub-$1.5M. The $500,000 to $700,000 bracket is very strong, with lots of families selling to upgrade to $1M+ properties & lots of buyers ready to compete for their homes.
The inner ring markets 5-6km from the CBD are in strong demand, followed by the middle ring about 10km out. We are starting to see that classic ripple effect as more people expand their search to the middle ring where they can get bigger blocks at slightly better prices yet still with easy CBD access.
This Spring, Sydney & Melbourne will no doubt dominate news headlines but Brisbane is most definitely the market to watch over the next three years. The time to buy is now.
Here are my Top Suburb Picks for Brisbane
- Indooroopilly – offers a great mix of property types including new apartments & prestige homes. The new $450M refurbishment of Indooroopilly Shopping Centre has created a major suburban retail mecca & a real alternative to the CBD for major shopping excursions
- Carindale – just 10km from the CBD, Carindale is benefiting as people widen their search from the inner ring. It offers bigger blocks & homes for fractionally less & good shops including a Westfield
- Hendra – popular suburb with easy access to the airport. A value alternative to the renowned blue-chip areas of Hamilton & Ascot