So what’s changed in Brisbane and why should you consider it for your next investment location?
Lets start with the demand. There has strong population growth in Brisbane of late with a 1.5% increase in the population last year. A huge number, second only to Melbourne and equal to Sydney (major cities). There are 2.3 million people that call Brisbane home, accounting for 19% of the national population. Queensland has 4.8 million residence in total and more and more of them are moving to urban areas, mostly Brisbane.
Brisbane is fast becoming a global city and with its close proximity to South East Asia (mainly China) it has a massive advantage. A safe city, with a great climate so close to China, will make Brisbane a destination of choice for the Chinese moving forward. Once Brisbane’s airport redevelopment is complete it will deliver more international traffic than any other Australian airport aside from Sydney’s.
But we need to be careful. There is no doubt there is an oversupply in the Brisbane CBD apartment market and this is a cause for concern. If you are a regular reader of this blog you will know that at Nyko we believe the market tends to take care of supply issues itself and the figures show that is already happening.
In 2016 and 2015 Brisbane had over 26,000 unit starts each year – a huge number. However, if 2017 trends continue this will reduce significantly to under 16,000 starts. This will ease supply issues and reduce the vacancy rates that are especially being felt in inner city apartment buildings.
Brisbane’s vacancy rate is at a surprisingly manageable level, at 3.3% (3% is considered a reasonable market). We do know however that in some inner city locations that rate is over 5% and in the more desirable investment locations, like the ones offered by Nyko, that they are at approximately 2%. This is comparable to the Melbourne and Sydney levels of 1.7%-2.0% and considered low vacancy.
In last fortnights blog, we discussed Richlands, a middle ring south western suburb with a vacancy rate of just 1.9% – this is the kind of investment location we believe will not only perform well but has the attributes to outperform many Melbourne and Sydney marketplaces. With an entry level of $389,000 for 3 bedroom town houses they offer great value for money at price points not available in Melbourne and Sydney property.
Thanks again for taking the time to read this blog, see you all again in 2 weeks.