Portfolio Management Services is active in the Brisbane property market, buying investment properties on behalf of clients. The Brisbane market is an accessible one for first second-time property investors in particular.
To discover how Portfolio can help you take advantage of the best Brisbane property investment opportunities, call today on (03) 9621 1044.
Brisbane property gains predicted
The numbers are stacking up for Brisbane property investment, with property prices due for solid growth over the next two to three years according to Australian Property Investor editor Nicola McDougall.
“If you were an owner of Queensland property, southeast Queensland property you’d be pretty happy with how the market’s gone (in 2014),” Brisbane-based Ms McDougall told ABC 612 radio in Brisbane.
“We’ve seen (median house price) growth of between five and seven per cent this year, which is a good solid number bearing in mind that since the GFC there hasn’t been a lot of growth in the preceding four or five years so there’s a little bit of catch-up going on.
“We’re seeing more demand for properties in particular areas, especially in that 3km ring around the Brisbane CBD.
“… There’s only about 11,000 houses within 3km of the Brisbane CBD so when you think about that statistic it certainly makes sense that there’s so much demand for properties in those areas.”
Ms McDougall predicted the Brisbane property market was on track for solid growth over the next two to three years. For property investment Brisbane could easily prove a better option than Melbourne or Sydney.
“Brisbane might see in the vicinity of five to eight per cent growth next year and, again, they’re good solid numbers,” she said.
“If you add the two together, this year and (projected) next year, you’re looking at some double-figure growth there.
“… It might be that next year we get five to eight per cent growth, then the year after that when the other markets are coming off the boil we might still be getting that six or seven per cent growth.
“There is an element of catch-up happening here … I think Brisbane will have another good year next year, probably slightly better than this year, and we are now seeing a number of interstate property investors coming up here.”
Ms McDougall said the Brisbane property market was doing well generally, particularly the suburbs close to the Brisbane CBD, while some of the more affordable suburbs further out were also generating property investment interest.
“Those inner to middle-ring suburbs, the more affordable suburbs like Zillmere, Geebung, are sort of on the radar of a few property watchers because they are sort of around the $450,000, actually Zillmere’s median house price is $380,000 but it’s within 15km of the Brisbane CBD.
“Those affordable suburbs are starting to look attractive to investors, and, as I say, that inner ring, you go to any open home in Paddington, West End here on a Saturday and there’s plenty of people and those houses are selling within one day, often before the first open, often before the auction, because the demand for those areas is so strong.”
In terms of property investment Brisbane offers a range of opportunities, particularly for first- and second-time property investors.
Portfolio Management Services has been active in the Brisbane property investment market in 2014, buying investment properties in Brisbane on behalf of clients. The company has focused its Brisbane property investment strategy on buying established houses with excellent prospects for long-term value growth in key Brisbane suburbs.
It is a tailored version of the strategy Portfolio has successfully applied in the Melbourne and Sydney property investment markets for more than 40 years, generating property investment returns above the industry benchmarks according to independent analysis.
Everything from rising vendor expectations to insurance issues arising from Brisbane floods made market research crucial for anyone in the property investment Brisbane market, said Portfolio property acquisitions adviser David Powell.
“Investors need to be very picky about what they buy,” Mr Powell said. “Our clients pay us to do that research and find property that will make a successful long-term investment for them.”
Risks in apartment boom
Inner-Brisbane apartment construction is booming, with unprecedented levels of stock hitting the market.
Analysts say about 5500 new apartments became ready for sale in Brisbane in the second half of last year. It followed a record-breaking year for off-the-plan apartment sales in Brisbane in 2013.
The groundswell of Brisbane developments has led to a cautionary note from market analysts.
A report by social and economic market research firm Urbis last year warned the volume of apartment stock coming onto the Brisbane market was unlikely to be absorbed in some areas and would cause a build-up of stock through 2015.
Developers say completions will be staggered over several years. Rising constructions costs and peak prices for development sites may prevent some projects getting off the ground.
The explosion of apartment construction in Brisbane has been fuelled by low interest rates and years of undersupply of housing stock. While there are opportunities in the Brisbane property market, property investors need to wary of high-rise developments says Portfolio Management Services’ managing director Jock Bing.
“In most cases these properties are sold to investors, as few buyers actually want to live in them themselves, and for good reason,” Mr Bing said.
“Noise issues, extreme density of living, small floor plans, inability to improve or add value, compromised design and, of course, no scarcity or rarity factor. To me, that also means they do not make good investments.”
Portfolio has instead focused its Brisbane property investment strategy on established houses close to the Brisbane CBD. It is a property investment model Portfolio has successfully used to make some of the best residential property investments of the past 40 years.
David Powell said Brisbane presented an interesting opportunity for 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.
Ironically the perfect storm of property undersupply and low interest rates has increased the level of difficulty for investors, who need to look harder for well-priced investment property.
“It’s all good and well to identify a suburb, but then you have to identify the good streets in that suburb, and then whether a specific house will make a good investment,” Mr Powell said.
“That’s true of anywhere at the moment and in Brisbane it’s even more so. You can’t just throw a blanket over an area and say everything there is good. There’s a lot of good stuff and a lot of bad stuff.”
To find out more about how Portfolio Management Services can help you achieve your property investment goals in the Brisbane market, call today on (03) 9621 1044.