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Empower Wealth Blog post by Empower Wealth

2015 Australian Property Market Outlook | Part 3 – Brisbane and Regional QLD

Property Investment in Brisbane had been a hot topic in recent months. Some might say it is unwise to invest in a holiday area but some other might say Brisbane is going through a re-gentrification and is at the top of their property market cycle.

Ben and Bryce will discuss these issues including what areas of Brisbane are looking at a high level of developments, the infrastructure changes and how it will affect the area’s growth, political influence and more.

They will also be discussing about Regional Queensland such as the investment potentials at the Southeast Coastal areas: Sunshine Coast and Gold Coast. Is it a good time to invest in these holiday area, will the tourism industry continue to fuel the economic movement, how is the job market performing and likely to perform in the future and more. Watch this video now to learn more.

The 2015 Australian Property Market Outlook is broken into six short parts.

Part 1: Property Market in Sydney and Regional NSW
Part 2: Property Market in Melbourne and Regional VIC
Part 3: Property Market in Brisbane and Regional QLD
Part 4: Property Market in West Australia, South Australia and Tasmania
Part 5: Property Market in Northern Territory and Australian Capital Territory
Part 6: Summary of Australian Property Market in 2015


2015 Australian Property Market | Brisbane and Regional QLD [Transcript]


Ben: Let’s move into Queensland, our third biggest state and let’s talk about that story there. So Queensland is a very large state with all these several large city metropolises. An example, when we talk about Townsville and Cairns, those cities can be bigger than the sizes of Bendigo and Ballarat and those types of areas. So let’s concentrate on Southeast Queensland. Start with Brisbane, your views on Brisbane.

Bryce: Yeah, I came back from Brisbane yesterday and it was very, very hot up there. So it’s the month that you don’t want to be there. But I think that Brisbane has got lots to like. I think back in the early 2000s to mid-2005, there was such a price discrepancy between Melbourne and Sydney, that a lot of people were deciding that they would maybe sell up in Sydney and Melbourne, chase the lifestyle, pay cash for the property and have some money left over for some lifestyle things.

I think that sort of thing exists again and not only that. You’ve got the Sun. There are job opportunities. You’ve got a very proactive government up there. So I think the fact that it’s – that price discrepancy is so big …

Ben: An affordability story.

Bryce: It’s affordability and the fact that there’s opportunity for income up there as well. I think that leaves Brisbane as a very strong potential and it has got really great yields. But again, to say Brisbane is a bit misleading because there are certain types of property in certain price brackets that I think will really go well and there are others that I don’t think will..

Ben: We’re at the upward cycle, so we haven’t actually peaked. So we talked about the pace of growth occurring differently in the Melbourne and Sydney markets because we’re over that peak of growth. But Queensland and Brisbane is actually still on that run. So even some of these suburban areas are actually going to get some uplift because let’s face it, they’ve been flat since the floods and there has been nothing that has been stimulating that.

So I think once I get the election out of the way and that consumer sentiment and confidence comes back, we’re going to see Brisbane. Actually I have a pretty good time of it across most markets. But again we’re very specialized about what we’re buying because we don’t want to just get that uplift. We actually want to get long term growth, don’t we?

Bryce: And particularly if you’re buying into state. You want to make sure that it’s a low fuss investment. So, some of the properties that are really exciting and the locals love do have a little bit of extra money that’s attached to them. So you got to sort of be – keep in mind that if you are investing inter state, the type of property that you want to buy should be – take into consideration that it’s sort of a quick drive away from them.

Ben: I agree. Let’s look at the Southeast Queensland market. So I will start with the Sunshine Coast and let’s roll into Gold Coast. Your views there, Bryce?

Bryce: Yeah, look, I think the Gold Coast in particular has some opportunities. It has been bumbling along the bottom for so long. It is only an hour away from a capital city job market. They have got the train all the way down to Varsity Lakes, looking to extend that eventually down to the airport.

Ben: A new light rail behind the main sort of tourism zones and tourism districts.

Bryce: Yeah, they’re about to spend a lot of money on the Pacific Fair Shopping Centre there in Broadbeach. So it always suffers from a bit of a transient issue of the population and does suffer a little bit from glass ceilings. But given that it has been bouncing along the bottom, again, if you pick the right asset, you can get a yield play with probably a little bit of upside as well.

Ben: There is definitely a timing play we’re sort of saying around that area. It would be very specific at that price point too. So I wouldn’t just be going and grabbing that sort of nice property thinking. That’s what everyone wants. You’ve got to be careful about the price point you pay for both the units, townhouses and also the houses you might be looking at in that particular market.

Sunshine Coast, we’ve got the medical university. We’ve got the upgrades that are going on through there. So that’s another story of a depressed market where we saw a lot of Mexican money. So south of the border money coming in from New South Wales and Victoria coming into this marketplace, it’s very much a lifestyle community. Wonderful lifestyle up there but it’s just about the job’s growth and the income. So depressed, we’re starting to see a bit of that coming. So I suspect we will see some upward lift in the Sunshine Coast area.

Bryce: When we were on the show, you could see that – I did a client on the show on the Sunshine Coast. So the sort of the southern end of the Sunshine Coast gives them those job opportunities and the access to the CBD. The further north you go, the further you are away from those jobs.

Ben: Yeah. Around the ground in terms of Townsville, Cairns and the mining centres, look, there are definitely some opportunities in those particular markets. They are timing markets. They’re depressed markets. So from a yield play, do your math. Do your sums. Keep away from the mining centres. There’s blood on the streets in certain parts of that. We’re going to see some real terrible results for those people who got caught up in the hype that is a mining boom and we’re going to see those people unfortunately lose a fair bit of money on their investments unless they can stay put for a good decade before they probably come up for oxygen again.

So real sad story for them. Again, it’s about another reminder to do your research and know when to buy into those markets and when to get out of those markets.

Bryce: Let’s talk about the point that you and I chat about a lot with – you sort of pre-empted was – you know, you want to be in a market that you’re a price taker rather than price maker and in those mining towns, you’re the price maker. Now you’re seeing the – when it’s running nicely, everyone is thinking it’s greatest thing. But now that you’re seeing on the other end of it, blood on the streets isn’t overstating it at all.

Ben: No, it’s shocking. I mean we’re seeing properties that are being bought for $400,000 now valuing up $200,000. We’re seeing rents of $1200 a week now. They’re barely getting $300, $400 a week because the mines are going into slowdown mode. Workers are being laid off. Again, it’s a classic case of a typical mining bump. So keep away.

Speaking of mining and mining centres, let’s head over to the West and talk about Western Australia, mainly Perth. What’s your view on …

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