Brisbane’s market is continually recognised as a strong investment opportunity by Australians. Queensland’s capital is showing a strong economic outlook as it evolves from the state’s largest employment hub towards a thriving world city. See below the five reasons why Brisbane’s market is a positive investment prospect.
- Strong Economic Outlook
Queensland has bounced back from a previously subdued level of economic growth, with the regional economy alone expected to grow 3.0% over the 2017/18 fiscal year. Continual shifts from the manufacturing industries towards more broad-based business, combined with strong consumer spending is expected to boom the economy in the coming years. Industry leaders such as Delliotte Access Economics have forecast Queensland’s economy to grow at an average of 3.8% per annum over the next five years, grossly outpacing the expected national average growth of 3.0% per annum.
- Significant infrastructure spending
Over the past 12 months Brisbane has seen its infrastructure pipeline grow aggressively. Over $21 billion worth of significant public and private infrastructure works are currently approved in Brisbane’s inner ring alone. The city is undergoing substantial investment into transport networks, entertainment hubs and innovative civic spaces, as a proactive initiative from Queensland governing bodies to create efficient systems for Brisbane’s future population. Ultimately, this improved infrastructure will boost the attractiveness of Brisbane as a global city and directly create job growth through major works.
- Affordability creating demand
It has been no secret that Melbourne and Sydney have lead the country in terms of price growth over the last five-year period. However, this has resulted in Brisbane’s apartment stock achieving a more economical status for investors and owner occupiers alike. Recent data released by CoreLogic has shown that Sydney’s market is now 75% more expensive than Brisbane.
Brisbane’s real draw card comes from the opportunity to purchase proximate to one of Australia’s fastest growing economies. Investors have the opportunity to acquire quality apartment stock at a rate of $8,000 – $10,000 per square metre immediately in the CBD. Comparatively, Sydney investors are purchasing at a rate twice as high to acquire properties 15-20 kilometres from the CBD. This new economic environment is likely to attract new buyers into the market through lower entry prices, lesser stamp duty, higher yields and the potential for stronger long-term capital growth in comparison to separate markets.
- Supply is falling sharply
Brisbane’s market has constantly been in the limelight over the last 18 months both in the media and here at Blue Wealth. Between 2014 and 2016, Brisbane was the subject to a supply increase, that was resultant of historically low interest rates generating heightened development levels. A combination of regulatory changes to developer lending criteria, rising construction costs and foreign investor caps have resulted in a significant drop in the rate of proposed development reaching completion. Consequently, inner city apartment supply is forecast to shrink by 30% over 2018, with a similar effect occurring in 2019.
- Strong Population Growth
Brisbane’s growing job market and strengthened economic conditions are expected to increase migration from overseas in the midterm, while housing affordability is forecast to further spur level of interstate migration as first home buyers from Melbourne and Sydney see the city as a burgeoning opportunity. Population growth has been rising year on year in Queensland since 2015, in a period that is reminiscent of the early 2000’s. If current levels of interstate migration continue, it is expected that an extra 20,000 Australian residents will call Queensland home by the end of the year.
We see Brisbane as a market with great potential over the long term. Population growth and rapidly expanding economy will likely push a healthy property market over the next decade, as a result we are excited about the prospects of the city.