With trends predicting that Brisbane real estate growth is set to continue, Helen Goltz sought some tips from those ‘in the know’.
We invited four industry experts to share their knowledge on how Brisbane is faring in the building and property arena.
Q1: Where’s the next hot spot?
Shane Garrett [Senior Economist, Housing Industry Association Ltd]: During the 2012/13 financial year, the South Brisbane locality saw some $210 million worth of new dwelling work approved. In addition to this, North Lakes/Mango Hill saw its population grow by 8.8 per cent and $155 million worth of new dwelling approvals. A strong pipeline of activity is also earmarked for Brisbane’s Fortitude Valley area.
Cameron Kusher [RP Data research analyst]: If you are looking for capital growth then houses closer to the city are most likely to see stronger rates of capital growth. For rental yield, the strongest prospects are usually inner city units or outer more affordable houses and units close to a major working node or infrastructure which should drive rental demand.
Besa Deda [Chief Economist, St George Bank]: Logan City – St.George is seeing home loan applications up by 30 per cent across Logan City area. With house prices in this region still very affordable and large amount of investment going into the area it will only continue to thrive.
Q2: Is it a good time to sell, or just hang in there a bit longer?
Shane Garrett: The low cost of financing, solid price appreciation and relatively high rental costs actually make it a good time to buy, rather than sell a dwelling.
Angie Zigomanis [Senior Manager – Residential, BIS Shrapnel]: If you are looking to sell to upgrade it is often better to do it in a softer market or the early stages of an upturn as you have more bargaining power when purchasing and the cost of upgrading is narrower.
Cameron Kusher: The market tends to be a bit quiet for selling but come spring there are likely to be more buyers and it could be a better time to sell than right now.
Besa Deda: Some indicators suggest some stabilisation in housing prices could be ahead. However, the ongoing shortage of dwellings means house prices are unlikely to head south soon. Homeowners could hang on a bit longer if that suited their personal and financial circumstances.
Q3: Are there still good bargain buys around?
Shane Garrett: With rental costs still relatively high, those considering the move from rental to home ownership will find that buying represents a bargain from an affordability perspective.
Angie Zigomanis: There are many middle-to-outer suburbs that are offering good rental yields that are likely to also benefit from price growth as the market recovers.
Cameron Kusher: There are well priced opportunities around, they are just becoming harder to find. Spend the time researching properties and suburbs.
Besa Deda: No matter what point in the housing cycle we are, there are always bargains to be found. These bargain homes are likely to need renovation or they might have poor transport links with potential for improvement in the future.
Q4: Are units or houses in? (Are backyards making a comeback or are buyers wanting to be near the cafe precinct?)
Shane Garrett: Over the long term, units have increased their share of the new dwelling market. It is likely that the detached house share will recover a little over the next few years, with a 65/35 split likely to persist in favour of detached house building. Much of the unit construction is taking place in prime urban areas, with detached house building concentrated in more outer suburbs and in regional areas.
Angie Zigomanis: Outside of the baby boomer generation, the next fastest growing demographic are the Gen Ys, who will be entering a new life stage of ‘coupledom’ and families. Their preferences are likely to dictate whether units or houses are “in”.
Cameron Kusher: With very little growth over recent years, sales activity has increased by a greater amount for houses over the past year and I think they remain a more popular option. In saying that you only need to see all of the high rise development taking place in the inner city accompanied by the restaurants and bars to know that buyers are accepting unit living as a viable alternative to owning a house.
Besa Deda: The growth in housing prices has been much bigger than in unit prices. It suggests that there has been greater demand for stand-alone. While the café lifestyle that often apartments near the city can provide is in demand there is ongoing popularity for the backyard too. The ageing of Australia’s population is spurring people to move to more manageable and smaller properties.
Q5: It’s 20 years in the future, what will Brisbane look like?
Shane Garrett: New dwelling stock will be largely of the high density variety, with the city’s footprint expanding at the edges to accommodate more low density homes.
Angie Zigomanis: It will be likely to be a mix of housing across the suburban fringes (although most likely on smaller blocks than you see now), inner city apartments and increasingly infill medium and high density sites in the middle suburbs.
Cameron Kusher: Looking at what is happening in Fortitude Valley and South Brisbane at the moment provides a glimpse into the future. A lot more high density development in the inner city which means relatively fewer houses.
Besa Deda: The Brisbane CBD will expand and push out to include much of South Brisbane. A feature of the expansion will also be the growth of higher density living, particularly along transport corridors and existing centres.