BRISBANE MARKET IN UPSWING

Wednesday 08 Apr 2015 Written by: Paul Thornhill

Brisbane was tipped by many analysts as the market to shine in 2015. So nearing the first three month point of the year, how’s it travelling?

To date the answer is pretty well. While growth was sluggish through the first half of last year, in the second half the performance numbers were dialed up – for houses at least.

Here are the figures:

Brisbane

Median price – house, $480,000

Year on Year growth – house, 6.5%

Median price – unit, $385,000

Year on Year growth – unit, 0.5%

Capital average

Median price – house, $550,000

Year on Year growth – house, 9.0%

Median price – unit, $460,000

Year on Year growth – unit, 5.6%

Sydney

Median price – house, $780,000

Year on Year growth – house, 14.7%

Median price – unit, $588,000

Year on Year growth – unit, 9.5%

CoreLogic RP Data March 2015

Meighan Hetherington, Director at Property Pursuit says Brisbane is now in a classic upswing phase.

“In the first five weeks of this year, there were plenty of buyers coming in to the market but the number of listings was low, leading to hot competition for some properties. The result has turned the market with high prices and strong media sentiment encouraging vendors to put their place up for sale,” she says.

Brisbane is now is a classic upswing phase.

Hetherington also points to the price difference between Sydney and Brisbane to explain the re-emergence of interstate investors over the last six months.

“The median price difference between Sydney and Brisbane is now 41%, the largest it’s been since 2004. What we have seen in the past is that when the Sydney market jumps forward, many investors look around and find Brisbane’s lower prices and higher rental yields attractive.”

According to CoreLogic RP Data, it’s the inner-middle ring, six to ten kilometres from the city, which dominates Brisbane’s best performers over the last five years.

For investors eyeing Brisbane, Hetherington nominates houses and townhouses in ‘mid-range suburbs’ like Wavell Heights and Kedron in the north and Holland Park in the south as the best targets.

“In these areas, well-selected houses in character-rich streets with good access to transport, shops and schools truly stand out. Properties built in the Queenslander style and townhouses in the right clusters are, according to our figures, selling 3.6% – 4.4% above what comparable data would suggest.”

Take a look at the figures:

Kedron 

Median price – $624,000, 5 year average growth – 4.1%

Holland Park

Median price -$620,000, 5 year average growth – 3.6%

Holland Park West

Median price -$597,000, 5 year average growth – 2.0%

Wavell Heights

Median price -$590,000, 5 year average growth – 4.0%

Stafford

Median price -$530,000, 5 year average growth – 3.2%

Stafford Heights

Median price -$510,000, 5 year average growth – 1.9%

Interstate buyers have been active but Hetherington says they should get local advice before moving ahead.

“We have seen some instances of out-of-town advisers coming up here and buying 20 properties in a week. In some cases, the selections appeared to have been made on location alone and don’t portray a good understanding of the Brisbane market’s peculiarities or pricing.”

Out-of-town advisers have been buying up to 20 Brisbane properties a week.

Apartments have not joined in the uplift to date. Hetherington cautions investors that properties which don’t deliver liveability are unlikely to generate capital growth and often suffer declining rental returns.

Hetherington says there are plenty of signs that Brisbane’s market, driven by some buyers’ fears of missing out and good demand from interstate investors and expats will continue to grow, but is unlikely to experience a Sydney-style boom.

“What I see is a continuation of moderate growth over the next two years. I doubt we will return to the peaks of frenetic buying and troughs pattern of the past.”