Brisbane was down slightly in capital growth terms over October according to Core Logic RP Data, moving down 0.2%. However, the sunshine state capital has been one of the better performers over the quarter, increasing 1.2%, after Melbourne (3.1%) and Sydney (1.5%).
Capital growth in hot house markets in Melbourne and Sydney have also eased over the month, moving up only 0.6% and 0.3% respectively.
Units in the Brisbane-Gold Coast area reached 2.4% growth in the quarter, faring better than their housing counter parts, which reach 1.2% capital growth.
In a sign of balance over the market, Brisbane has fared well in rental yields, achieving 4.3% yield on houses and 5.3% for units.
Overall, the Brisbane market looks to be tracking on steadier course than southern counterparts, with confident growth expected in the next two years.
In this month’s edition of the Queensland Market Update, we look at two Brisbane suburbs to keep an eye on in the next six months, the anticipated strength of the Brisbane market over the next two years, Federal Government funding for the Gold Coast Light Rail, and all the other facts and figures of the market.
Auction Clearance Rates
Brisbane recorded results ranging across the spectrum over the month of October, with a few external factors to work around likely playing a part in auction rates.
According to Domain Group data, the beginning of the month began with a 53% clearance rate for the weekend of the 3rd of October, the weekend of the AFL and NRL Grand Finals.
The following weekend shot up to a 76% (10th of October) clearance rate, before easing off over the remainder of the month: 67% (17th of October), 53% (24th of October), 59% (31st of October).
Results over the October have been in step or stronger with monthly averages over the last 12 months.
Brisbane Monthly Clearance Rates
Brisbane Suburbs to Watch in the Next Six Months
Corinda
Situated approximately 8kms south west of the CBD, Corinda is bordered to the west by the Brisbane River.
As a consequence of the Brisbane 2011 floods, Corinda was deemed “undesirable”, however the massive recent growth in popularity of neighbouring suburbs Graceville & Sherwood has had a ripple effect that has benefited Corinda. According to RP Data the suburb enjoys an average annual capital growth of 6.49% in houses with a median of $700,000.
The CBD is easily accessible from the Corinda railway station, which also connects residents with entertainment and educational facilities such, including the Indooroopilly Shopping Centre and the University of Queensland.
An ever attractive feature of Corinda is that it has still retained a large portion of older style timber homes on larger blocks. For young families Corinda also satisfies most standards of education with two private schools, St Aidan’s Anglican Girls School (Prep to Year 12) and St Joseph’s Catholic School (Prep to Year 7), while Corinda State Primary School and Corinda State High School are towards the south.
Aspley
The opening of Brisbane’s latest tunnel, Legacy Way, has allowed the western suburbs greater access to the north and vice versa, and Aspley is certainly reaping the benefits. Legacy Way connects residents to the airport, DFO shopping, Royal Brisbane Hospital, shopping, and the RNA showgrounds. Aspley has proven especially fruitful for investors with an annual growth rate of 5% and a recent rise in median prices to $520,000, according to Core Logic RP Data. It is one of the last remaining suburbs close to the CBD that you can snap up a landed house for under the averages.
Situated 13kms north of the CBD it enjoys great improvements in transport infrastructure cutting the commute to city by 7-10 minutes. Aspley is also home to a Hypermarket, Home maker centre, and what is probably one of the last remaining tourist caravan parks so close to the city edge.
Families are well catered for with primary and secondary schools, and the vicinity to Sunshine Coast arterial roads means weekend getawayers can be on the Caloundra beaches within an hour.
Brisbane Market Looking Strong
Brisbane is being frequently tipped by commentators as the market to watch in the immediate future as buyers move north to secure more affordable property.
The attraction to buy quality property that is still much closer to the CBD and amenities, such as quality schools, public transport, and beaches (obviously), is drawing buyers to Brisbane and South East Queensland, and this is expected to continue to fuel growth in a well-balanced market.
Property markets in Melbourne and Sydney are speculated to dip over the next two years, however Brisbane is anticipated to buck the trend in the coming years and experience steady growth.
Whether markets in the southern states dip as much as they have been forecasted to – or even at all – remains to be seen.
However, growth in Brisbane looks like a very strong possibility as buyers look to the sunshine state capital for greater value in investment than is otherwise currently available from the hotter markets.
According to BIS Shrapnel’s outlook report into the property market from 2015 to 2018, Sydney house prices are anticipated to slow down significantly by the end of 2015, and then dip by 2.7% over 2016 to 2017, and 2.3% over 2017 to 2018.
This may seem like a dour forecast in the coming years, but it is worth noting that prices in Sydney have surged by more than a massive 20% in 2015 alone.
Conversely, according to the BIS Shrapnel report, Brisbane will move a healthy 13.2% from 2015 to 2018.
Although Brisbane hasn’t reached the dizzying heights that Sydney has surged to this year, it has provided buyers with a far more balanced market to purchase in.
Growth has been far steadier in the Brisbane and Gold Coast combined region, which has become a huge attraction to buyers. Very much one foot in front of the other, Brisbane capital growth has risen at 3.5% for Year on Year growth according to Core Logic PR Data.
Based on the BIS Shrapnel report, the rate of growth will likely increase in the next two years, but not accelerate faster than buyers can keep up with.
Balance in the market is offering buyers better opportunities for investment or to enter the market, perhaps proving that the tortoise will always beat the hare.
Gold Coast Light Rail moving to Stage 2 with Turnbull
Malcolm Turnbull has announced federal government funding will be injected into the extension of the Gold Coast Light Rail, joining state and local government levels to financial commit to the project.
The Federal Government will be pledging $95 million to the second stage of the $700 million infrastructure project which will now be completed in time for the 2018 Commonwealth Games.
“Construction of Stage 2 of Gold Coast Light Rail will provide the missing link from the Gold Coast to Brisbane,” Prime Minister Turnbull said in a joint statement from the Queensland Premier, Annastacia Palaszczuk and Deputy Premier and Minister for Transport, Jackie Trad.
“This project is vital for the Commonwealth Games transport task. It connects five competition venues and nine events to accommodation and public transport interchanges.”
“With this announcement from the Commonwealth and the $55 million funding commitment from the Council, all three levels of Government are now on board to deliver this legacy project for Queensland.”
Expressions of interest to build the project closed in September and the State Government will be looking to appoint a contractor in 2016 from six national and international firms.
It is expected the construction will support more than 1,000 jobs.
The Light Rail project will connect Brisbane to the Gold Coast and will have application after the Games are completed well into the future.
Aside from the economic stimulation and added transport for the Commonwealth Games, the light rail will provide vital transport increase between the state capital and the tourist centre of the Gold Coast.
It is expected that the rail will be able to ease the congestion from the increasing levels of traffic being accommodated by the Pacific Motorway, making the completion of the rail all the more timely.