Advice for new  Brisbane  investors

Whilst this information is good news for property investors, it is also great news for people that own property in these suburbs or nearby suburbs.

Look for Brisbane’s best properties in the inner- and middle-ring suburbs.

Research shows that those suburbs close to the city centre generally perform better than all others over the long term.

The research shows that (in general) properties closer to the CBD and closer to water increased in value faster than those further from the CBD and further from water.

And this general trend has again been confirmed by a paper by the Australian Housing and Urban Research Institute, which found that both in percentage terms and in absolute terms over the long haul suburbs located reasonably close to the CBD, where demand is high, close to employment and where the most people want to live and where there’s no land available for release, outperformed the outer suburbs.

One of the significant changes to occur in Australian cities over the past 50 years, and which has pushed up inner- and middle-ring suburb property values, is gentrification.

Interestingly this wasn’t caused by deliberate planning policy but resulted from a set of demographic changes that have occurred in most major capital cities around the world.

The exodus of industry, migrants, and many workers made way for gentrification of our inner suburbs where initially house prices and rents were cheaper than in the suburbs.

Later, our changing demographics with declining household size, in part because we were getting married later and having fewer children, meant that small inner suburban dwellings or apartments provided ideal accommodation for the expanding cohort of professionals who worked in or close to the CBD.

Gentrifiers were initially drawn to these inner suburbs by the diversity of jobs, educational opportunities, and lifestyle and this trend continues today as more and more Australians are swapping their back yard.

Four Suburbs that MUST be on your radar

With leading Economists tipping Brisbane to lead the nation for capital growth over the next few years, I suggest you do your research before jumping on in!

BIS Schrapnel has predicted 13% growth for Brisbane out until 2021 and a recent report by QBE Insurance has predicted 11%.

Whatever the outcome, it is clear that Brisbane will continue to tick over with steady growth, while the rest of the nation takes a breather.

While Brisbane houses have only averaged around 25% growth over the last 5 years (or 5% per annum), these suburbs have outperformed and will continue to do so:

The Entry Level Suburbs

Budgets starting $530,000 – $600,000

Keperra and Chermside West have been desirable suburbs for a number of reasons.

These suburbs sit around 9-10km from Brisbane and are the furthest out we recommend buying.

Let’s take a look at some of the data*:

Keperra

The appealing thing about Keperra for us gets down to the Demographics.

Firstly, nearly two-thirds of people own or are paying off a mortgage, a high owner occupier percentage.

Weekly Family Income has continually hovered above the Queensland average but in recent years, it has started to move even further ahead.

The most common Occupation in this location is Health Care and Social and according to the Queensland Government, this is going to be the fastest-growing sector in Brisbane over the next few years and with our aging population, there will always be work.

These higher incomes and job certainty, mean that people will have more to spend on their homes and be much more comfortable in doing so.

Adding to that, Keperra is also a train station suburb and according to Matusik research, suburbs close to rail have grown 40% more in value over the last decade in Brisbane.

In the last 5 years, while Brisbane has averaged around 25%, Keperra has almost 30% in the same time.

The future is bright and if you know where to find the superior pockets, you will be handsomely rewarded.

Chermside West

Chermside West has very similar Demographics.

Income and Occupation are very similar and the owner-occupier percentage is almost 80%!.

We are seeing this suburb really gentrifying as social housing and retirees move out, they are being replaced by younger professionals who are targeting the nearby Craigslea State School catchment.

The suburb also boasts two hospitals that draw health care professionals to the area and it benefits from the development of neighbour Chermside into a type of Satellite City.

While many investors are attracted to Chermside, we would prefer Chermside West, with its favourable Demographics, higher owner occupier percentage, and superior school zone.

You also get all the benefits of all the Chermside upgrading without having high rise and business on your doorstep.

The numbers tell the story here also with a rise of 36% over the last 5 years, well above the Brisbane average.

Other Entry-level suburbs to keep an eye on;

• Stafford Heights
• Mitchelton
• Everton Park

With Brisbane tipped to lead the nation for capital growth over the shorter term, it will see interest rise in the Brisbane market.

While there will be opportunities available for almost every budget, it is important to understand the intricacies of each suburb.

Even within these locations, I have mentioned, I would be reluctant to buy in some streets and pockets within these suburbs.

It takes on the ground knowledge and some content to understand the less desirable areas, the flood locations, and undulating areas.

On the flip side, if you get the location right, you will be rewarded with above-average capital growth and be able to set yourself up for the next stage of the property cycle, while others tread water.

* Sources Domain / SQM Research