(Pictured: Brisbane’s Story Bridge & City Skyline)
Though Australia is an incredibly vast country with plenty of room to spread out, most Australians choose to live close to the financial, cultural, and transport hubs inherent in a city. In fact, World Atlas describes Australia as ‘one of the most urbanized countries in the world, with 89.1% of the population living in cities’. Brisbane, Melbourne, and Sydney are Australia’s most populous cities, boasting populations of 2.3 million, 4.5 million, and 4.9 million respectively. Given Australia’s relatively small total population of just over 24 million, the combined total of these 3 cities alone accounts for quite a large percentage of Australians.
In this, the first in a 3 part series of articles, each of Australia’s three largest cities will be investigated with the intention of unearthing the unique real estate investment opportunities each city currently offers. To begin, we take a closer look at Brisbane, and the current opportunities available in this laid-back sub-tropical city in the southeast of the state of Queensland.
First settled by European settlers in 1824, Brisbane began as a penal colony and was the dumping ground for the overflow of Sydney’s worst convicts. However, Brisbane has worked hard, and has well and truly shaken off these unsavoury beginnings. The city first gained international respect in the 1980s as host of both the 1982 Commonwealth Games and the 1988 World Expo, and has more recently been described as ‘an intelligent, imaginative and culturally significant city that welcomes change, diversity and growth’.
A significant part of this change and growth is evident in the Brisbane real estate market. In the housing sector, Australia has, by international comparisons, an incredibly strong market, achieving the 6th highest annual rise in property values across the last 50 years. As Australia’s 3rd most populous city, Brisbane has kept pace with this growth.
Over the past 10 years, median house prices in Brisbane have grown 58%. In some of the highly sought after inner city suburbs, property values have risen 20% in the space of a single year. While some may see this level of growth as unsustainable, Real Estate Institute of Queensland’s chief executive Antonia Mercorella disagrees. She believes that one of the major selling points of the Brisbane housing market is in fact its sustainability. ‘Throughout the southeast corner, our growth is based on an improving value proposition, which means it is reliable, sustainable capital growth. There’s no boom or bust here in Brisbane.’
When it comes to investment opportunities, there is much to be said for the ability to buy low within strong overall markets. In the Brisbane housing market, one of these opportunities may very well be in new, inner city apartments. The opportunity being in the current oversupply of new apartments and the subsequent fall in unit prices. One real estate report showed a $80,000 drop in sale price for apartments in the September 2017 quarter. In typical fear mongering fashion, some media has taken to reporting this drop as the beginning of a property ‘bloodbath’. However, for those investors with the financial stability to wait the market out, this area may very well be a future goldmine.
For those looking for a different investment vehicle, or to avoid the speculation inherent in buying in the down market of inner city apartments, the following reports offer up-to-date facts and figures about various aspects of the Brisbane office and industrial markets: Brisbane Industrial Vacancy October 2017 and Brisbane Fringe Office Market Overview December 2017.
Overall, the Brisbane property market is a strong, stable player within the bigger picture of the strong, stable Australian market. With an enviable climate, high lifestyle affordability, and ever growing international kudos, Brisbane is a city with a thousand opportunities.
*NB: All information is general in nature and does not constitute financial or investment advice.