Story by Nicola McDougall, editor of Brisbane-based
Australian Property Investor
BNE May/June 2015 |
s construction begins on Brisbane’s tallest building, the 274-metre, 90 storey high
) in Mary Street in the CBD, property investment in the city is
looking up. The project has reportedly generated $340 million in sales – the equivalent
of half the number of units (550) in the building – even before the first sod on the site was
turned. But that’s not all. The number of new units approved across the city has jumped 20 per
cent over the past year to more than 23,000, according to Master Builders Queensland.
“What we’re seeing is a fundamental shift in the supply of housing,” says Master Builders
deputy executive director Paul Bidwell. “South east Queensland is going gang-busters ... The
increase in unit figures can be attributed to the demand in investor sales and a desire for a
lifestyle close to shops, transport and other amenities.”
The current median unit price for Greater Brisbane of $385,000 also makes it an attractive real
estate proposition for most investors. As well as price, units provide the opportunity to live close
to the action of entertainment and café precincts, there’s no garden to tend or lawn to mow, and
smaller urban footprints mean less time spent cleaning and more time spent living life large.
The increased demand for unit living in Brisbane is being met by developers who, as the
latest data shows, are bringing plenty of product to the market. Gavin Hulcombe, a director
at Herron Todd White Brisbane, says of 10,000 units currently in the marketing phase 80 per
cent are sold, and potentially with 23,000 more to come there’s about 10 years’ supply within
four kilometres of the CBD.
The best way to mitigate any oversupply concerns, he says, is to chase quality, as the type of
product being offered plays a huge part in the ultimate success of an investment. “Location,
design, price point, standard of finish and quality of finish can vary from building to building,”
In terms of position, Hulcombe says off-the-plan unit buyers should seek locations with
handy, established lifestyle facilities such as Newstead or West End. Areas that may seem
appealing but are yet to reach maturity in infrastructure and facilities can struggle, he says.
In comparison, not only do Sydney and Melbourne generally have higher price points in
their new unit markets, there are areas that are already in oversupply territory. Experts say
Sydney’s inner-city, Lower North Shore and inner-west sub-regions currently hold the highest
potential for oversupply. Meanwhile in Melbourne, sources say, the CBD, Docklands and
Southbank are obvious areas with an oversupply of investor stock and there should be concerns
for anyone speculating on capital gains.
Brisbane, on the other hand, continues to provide some of the best rental yields in the
country, with returns of more than five per cent for unit investments common.
on a high