Burgeoning Brisbane
Brisbane used to be the underdog in Australia's property market, but it is now quickly becoming the next hotspot to invest in.
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Brisbane is attracting a lot of attention worldwide as Australia's dynamic new world city, in part due to its good showing as the host city of the 2014 G20 Leaders Summit. Now poised on the brink of playing a leading economic role in the Asia Pacific region, it is a growth city boasting a stable political environment, strong economy, and good population growth. It is also benefiting from a committed effort from the government to develop it as a destination for tourism and business investments.
All this bodes well for the Brisbane property market. In fact, the QBE Australian Housing Outlook 2014 expects Brisbane to outperform the other capital cities over the next three years, tipping 17% median house price growth on the back of a supply deficiency that will remain over that time. Similarly, the recent Smart Property Investment/PIPA Property Investor Sentiment Survey results revealed that 56% believe Brisbane offers the best investment prospects, significantly higher than Sydney's 13%, Melbourne's 11% and Perth's 9%.
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Affordability
Compared to Sydney and Melbourne, Brisbane offers more affordable properties, making it an ideal base from which new investors can begin their investment journeys or grow their portfolios. Although prices of apartments in Brisbane have been consistently increasing since 2009 (see Figure 1), they are still lower than those of Sydney and Melbourne. And while first-time investors may find it easier to gain a foothold in the market with interest rates falling and at a record low, downpayments are becoming larger and loan approval conditions tougher.
Figure 1: Price of apartments in Brisbane increasing since 2009
Affordability is a key factor for property investors and should be a consideration for those who want to sell their investments in the future.
Yield
Yield or total return is the other key factor to watch for. At the moment, Brisbane properties are presenting better yields compared to its larger capital city rivals. Rental yields in Brisbane are hovering around 6% while Sydney and Melbourne are seeing only 4 to 5%. Considering that interest rates are currently much lower than 5%, buying investment properties in Brisbane is likely to result in good positive cash flow. Let your tenant pay for your mortgage!
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Figure 2: Rental Yield in Brisbane City
Tsunami of Chinese Buyers
The next wave of Chinese capital flowing into the Australian property market are likely to target new destinations like Brisbane, Gold Coast, Adelaide, Perth and the suburbs of Sydney and Melbourne instead of inner city areas, according to a recent Knight Frank report. With the weak Australian dollar and the high RMB, Australian properties are appearing increasingly attractive to Chinese investors.
Similarly, a report titled Demystifying Chinese Investment in Australia jointly published by KPMG Australia and the University of Sydney's China Studies Centre, shows a switch in focus.
"Chinese high-net-worth investors and developers are looking to new destinations offering discounts on prime property such as Miami in the US. In Australia, Brisbane, Gold Coast, Adelaide and the regional suburbs of New South Wales and Victoria will start to gain more traction... The quality of life, weather, clean air and world class education institutions all act as a magnet to Chinese developers and migrants alike," the report says.
Conclusion
Brisbane is Australia's third largest city, and the growth powerhouse of the Australian economy, outpacing all other major national centres. In fact, Brisbane currently has the largest population growth for any Australian capital city. With a great lifestyle to offer and pleasant climate, it's also one of Australia's most "liveable" cities. Most importantly, the city is now coming out of a downswing in the property cycle, and is quickly on the road to recovery. Add to this the fact that demand in Brisbane's housing market continues to exceed supply, it is clear that now is an optimal time to invest in Brisbane's city fringe property market.
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Be one of the first few to enjoy a sneak preview of Lotus at Jade, an impressive new six-level residential apartment development in Brisbane's desirable northern suburbs, just 4km from the Brisbane CBD. Plus, get insights over dinner on why and how to invest in Brisbane, Australia and understand all about Australian property financing.
RSVP your attendance for 9 or 11 September here.
For more District Guides, you can head over to iProperty.com Singapore.
Brisbane used to be the underdog in Australia's property market, but it is now quickly becoming the next hotspot to invest in.
Brisbane is attracting a lot of attention worldwide as Australia's dynamic new world city, in part due to its good showing as the host city of the 2014 G20 Leaders Summit. Now poised on the brink of playing a leading economic role in the Asia Pacific region, it is a growth city boasting a stable political environment, strong economy, and good population growth. It is also benefiting from a committed effort from the government to develop it as a destination for tourism and business investments.
All this bodes well for the Brisbane property market. In fact, the QBE Australian Housing Outlook 2014 expects Brisbane to outperform the other capital cities over the next three years, tipping 17% median house price growth on the back of a supply deficiency that will remain over that time. Similarly, the recent Smart Property Investment/PIPA Property Investor Sentiment Survey results revealed that 56% believe Brisbane offers the best investment prospects, significantly higher than Sydney's 13%, Melbourne's 11% and Perth's 9%.

Affordability
Compared to Sydney and Melbourne, Brisbane offers more affordable properties, making it an ideal base from which new investors can begin their investment journeys or grow their portfolios. Although prices of apartments in Brisbane have been consistently increasing since 2009 (see Figure 1), they are still lower than those of Sydney and Melbourne. And while first-time investors may find it easier to gain a foothold in the market with interest rates falling and at a record low, downpayments are becoming larger and loan approval conditions tougher.
Affordability is a key factor for property investors and should be a consideration for those who want to sell their investments in the future.
Yield
Yield or total return is the other key factor to watch for. At the moment, Brisbane properties are presenting better yields compared to its larger capital city rivals. Rental yields in Brisbane are hovering around 6% while Sydney and Melbourne are seeing only 4 to 5%. Considering that interest rates are currently much lower than 5%, buying investment properties in Brisbane is likely to result in good positive cash flow. Let your tenant pay for your mortgage!
Figure 2: Rental Yield in Brisbane City
Tsunami of Chinese Buyers
The next wave of Chinese capital flowing into the Australian property market are likely to target new destinations like Brisbane, Gold Coast, Adelaide, Perth and the suburbs of Sydney and Melbourne instead of inner city areas, according to a recent Knight Frank report. With the weak Australian dollar and the high RMB, Australian properties are appearing increasingly attractive to Chinese investors.
Similarly, a report titled Demystifying Chinese Investment in Australia jointly published by KPMG Australia and the University of Sydney's China Studies Centre, shows a switch in focus.
"Chinese high-net-worth investors and developers are looking to new destinations offering discounts on prime property such as Miami in the US. In Australia, Brisbane, Gold Coast, Adelaide and the regional suburbs of New South Wales and Victoria will start to gain more traction... The quality of life, weather, clean air and world class education institutions all act as a magnet to Chinese developers and migrants alike," the report says.
Conclusion
Brisbane is Australia's third largest city, and the growth powerhouse of the Australian economy, outpacing all other major national centres. In fact, Brisbane currently has the largest population growth for any Australian capital city. With a great lifestyle to offer and pleasant climate, it's also one of Australia's most "liveable" cities. Most importantly, the city is now coming out of a downswing in the property cycle, and is quickly on the road to recovery. Add to this the fact that demand in Brisbane's housing market continues to exceed supply, it is clear that now is an optimal time to invest in Brisbane's city fringe property market.
_____________________________________________________________________________________________________
Be one of the first few to enjoy a sneak preview of Lotus at Jade, an impressive new six-level residential apartment development in Brisbane's desirable northern suburbs, just 4km from the Brisbane CBD. Plus, get insights over dinner on why and how to invest in Brisbane, Australia and understand all about Australian property financing.
RSVP your attendance for 9 or 11 September here.
For more District Guides, you can head over to iProperty.com Singapore.