Brisbane: The secret place for Investors

Posted by Jessica Pullen

Research shows that in developed countries such as Australia, population growth translates into increased demand for new housing, infrastructure, education centers, health facilities and transportation.

All of this increases employment, as well as private and government spending which are the main drivers of a countries economy.

As an investor, it is important to look at these key indicators when choosing where and how to invest, especially when thinking of investing in the property market. Identifying cities where potential growth has not yet been realised, is critical in securing investments with yield and capital growth potential that will secure returns on your investment.

This blog will identify why Brisbane is one of Australia’s capital cities with most untapped growth potential, as well as the areas that we expect to experience the highest potential growth in the coming years.

DEMOGRAPHICS

Projected percentage growth in Australiaʼs capital cities (2011-2031)

Australian Government, Infrastructure Australia (2015).

Share of SEQ Projected Population Growth by 2031

Australian Government, Infrastructure Australia (2015).

  • The total population of Greater Brisbane expects to reach 3,190,129 inhabitants by 2031.
  • Brisbane with a projected growth of 48.6% (2011–2031) is expected be the city with the second highest percentage growth among the countries capital cities.
  • 820,000 New residents are expected to settle in metropolitan Brisbane alone, which represents a sharp increase in population to the region.
  • Brisbane is forecast to experience 15% of South East Queenslandʼs growth, with Logan and Ipswich representing 13% and 23% of SEQ total population growth.

EMPLOYMENT

Projected employment growth by Region (2020)

Australian Government, Department of Employment (2016).

Australian Government, Department of Employment (2016). Regional Employment projections for five years to November 2020.

Brisbane South is the region with the highest projected emplyment growth within Brisbane with an expected increase of 11.8% by 2020.

Greater Brisbaneʼs projected employment level is expected to increase by 1,2887,000 by 2020.

Greater Brisbane is expected to experience a 9.1% increase itʼs employment level by 2020. This represents the 3rd highest percentage growth amongst the capital cities.

Ipswich and Logan are projected to be the region with lowest percentage growth in employment with an expected percentage growth of 7.7% and 7.6% by 2020.

Gold Coast is projected to be the area in Australia with the second highest employment growth (in thousands) (35,700 or 11.4%).

Brisbane North is the region expected to have the second greatest percentage employment growth 11.1% by 2020.

PRIVATE & PUBLIC SPENDING

Brisbane Live
World Class Entertainment
Prescint 2021
2 Billion AUD

New CBD Schools
High Rise Schools
500 Million AUD

Howard Smith Wharves
Reconstruction – Dining, Retail
and Tourist Centre 2020
110 Million AUD

Brisbane Metro
30,000 Passangers P/h
1.54 Billion AUD
7,000 Jobs

Queens Wharf
World Class Casino & Resort 2022
3 Billion AUD
8,000 Jobs

Brisbane Airport
Redevelopment 2022
3.8 Billion AUD
4,000 Jobs

More than 11 billion dollars being invested in these projects alone

All Aiming to turn Brisbane into a World Class City.

Expected to create in excess of 28,000 new jobs.

* Australian Government, Department of state development.

MARKET TRENDS

House Gross Rental Yield

Domain 2017. State of the market report.

Unit Gross Rental Yield

Domain 2017. State of the market report.

Median Sale Prices 2017

Brisbane houses median sale price is 54% lower than that of Sydney and 37% lower than that of Melbourne.

Brisbane unit median sale price is 51% lower than that of Sydney and 21% lower that of Melbourne.

WHERE TO INVEST?

While most investors are lured towards the more populated capital cities such as Sydney and Melbourne, where prices and capital growth rates have been at record highs, it would be interesting to center our attention on cities where prices are still low, and where most of the growth is yet to come.

Low housing affordability across the Australian capital cities as well as the current price gap between the Brisbane median house/unit price and those of Sydney and Melbourne, represents an opportunity for investors that wish to secure a property with relatively low capital investment in comparison, and with high growth prospects as reflected by the regions key economic indicators including; demographics, employment, private and public spending.

High amounts of private and public spending in infrastructure, commercial and residential developments, aim to turn Brisabne into a world city, show an overall confidence in the future of the Region and will in-turn add value to all existing and future residential properties.

Expansion of office-based businesses into surrounding suburbs, support the strong employment and population projections for localities such as Brisbane South. In addition to the current level of investment in infrastructure and residential development, this decentralisation will continue to increase demand and therefore support strong long-term growth of housing market in this area.

BEFORE YOU INVEST, LOOK FOR:
Quality School Catchment Current or Upcoming Development Activity
Good Access to Public Trasport Suburbs where prices are only just starting to grow or that show strong demand.

LOW HOUSING AFFORDABILITY THOUGHOUT AUSTRALIA

LOWER MEDIAN SALE PRICES (UNITS & HOUSES) WHEN COMPARED WITH THE OTHER AUSTRALIAN CAPITAL CITIES.

HIGH LEVELS OF PROJECTED EMPLOYMNET & POPULATION GROWTH

INCREASING DEMAND FOR BRISBANE HOUSING IN BOTH RENTALS AND SALES MARKETS.

HIGH LEVELS OF PROJECTED EMPLOYMNET & POPULATION GROWTH

POSITIVE ECONOMIC OUTLOOK FOR THE BRISBANE REGION WITH STRONG POTENTIAL FOR FUTURE CAPITAL GROWTH AND HIGH INVESTMENT YIELDS IN COMPARI- SON TO OTHER AUSTRALIAN CAPITAL CITIES.