Brisbane property investment opportunities

With Melbourne and Sydney property prices posting strong growth, Brisbane property investment opportunities should be front of mind for investors, according to Portfolio Management Services’ acquisitions team.

The team said the Brisbane property investment space presented great opportunities for both new investors and those seeking another property after benefiting from rises in the Sydney and Melbourne markets.

Recent figures from RP Data show median house prices in Melbourne and Sydney have undergone double-digit growth in the past year. The figures also revealed a fall in the typical gross rental yield on houses in capital cities, from 4.1 per cent to 3.7 per cent over the past 12 months.

RP Data research director Tim Lawless said the most significant yield compression was in Sydney and Melbourne.

“Over the past year we have seen Sydney’s gross rental yields fall by 47 basis points, from 4.1 per cent to 3.6 per cent,” Mr Lawless said.

“In Melbourne, where rental yields are even lower, we have seen gross yields fall by 32 basis points over the year to reach 3.2 per cent gross. Given the current rate of value growth and moderate rental growth, it won’t be long before Sydney yields have moved below those of Melbourne.”

In contrast, the median house price in Brisbane rose just 5.4 per cent year-on-year to the end of August, compared with 16.2 per cent in Sydney and 11.7 per cent in Melbourne. The average gross rental yield was also healthier at 4.5 per cent.

Portfolio Management Services’ Property Acquisitions Advisor David Powell said the Brisbane investment property market was easily accessible. Compared with the Melbourne and Sydney markets, there were more opportunities for property investors with budgets around $600,000-$700,000.

“In Melbourne and Sydney we need to look a lot harder for houses in that price range close to the CBD,” he said. “While a three-bedroom house … within 10 kilometres of the CBD will cost you $800,000-$1million in Melbourne, or $1million-plus in Sydney, in Brisbane $600,000-$700,000 will get you a similar property within 4-5 kilometres of the CBD.”

Mr Powell said Brisbane presented an interesting opportunity for residential property investors. Prices fell 25-30 per cent in a 24-month period including the 2011 Brisbane floods and 2012 Queensland election; they had since recovered to levels typically seen 3-4 years ago.

“Prices are coming off a very low base – there is a lot more room for growth compared with some areas,” Mr Powell said. “It’s a good place at the moment to be.”

Recent RP Data figures revealed the most affordable suburbs for houses within 10 kilometres of the CBD were Rocklea ($330,848), Keperra ($416,036), Tingalpa ($456,878), Chermside West ($471,657) and Nathan ($473,513).

Portfolio sees value in many of the “northern ring” suburbs about 10-12 kilometres from the CBD, said Mr Powell.

“These suburbs, along with several other neighbouring areas, are attractive to us because of the excellent transport links with the CBD, larger block sizes, access to quality schools and in the case of Chermside, large quality shopping centres,” he said.

“Many of these areas are seeing an increase in new residential construction, which is helping to improve the streetscapes and overall appeal of the suburb to buyers.”

Brisbane property investment opportunities will be the subject of Portfolio’s inaugural market update conference call. To book your place or to discuss the best property investment opportunities available to you, contact Portfolio Management Services on 9621 1044.