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BRISBANE INSIDER

Story by Nicola McDougall, editor of Brisbane-based

Australian Property Investor

magazine. See

www.apimagazine.com.au

BNE May/June 2015 |

9

A

s construction begins on Brisbane’s tallest building, the 274-metre, 90 storey high

Skytower (

pictured right

) 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,”

he says.

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.

Development

on a high